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Richard, Tax Attorney
Category: Tax
Satisfied Customers: 53721
Experience:  29 years of experience as a tax, real estate, and business attorney.
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My son and I were both on the title of the home we both live

Customer Question

My son and I were both on the title of the home we both live in full time...only residence. We decided to refinance the home to a lower interest rate. The best option was to use my sons veteran status for a VA refinance. This required us removing me from the title since the Veterans Administration will not allow parent and child on refinance. The title company has us sign a Quit Claim to remove me from the title and told us we could add me back to the title on the refinance was completed. Is this going to cause us a tax problem? After the fact, I have heard that this may constitute a gift to my son and there will be taxes due.
Submitted: 6 months ago.
Category: Tax
Expert:  Richard replied 6 months ago.
Good afternoon. My name is ***** ***** I look forward to helping you. No, this will not create any tax issues. This will indeed be a gift. Under Section 102 of the Internal Revenue Code, a gift is not income. Thus, there are income tax issues. And, there should be no gift tax consequences. Recipients of gifts are not subject to gift tax. And, there should also be no gift tax due from the donor. Each donor can give $14,000 per year per person under the annual gift exclusion. In addition to that, for any amounts in excess of the $14,000 in a year, each person has a $5,450,000 lifetime exemption....which means a person can give a cumulative amount of up to $5,450,000 in gifts over and above the $14,000 annual gift exclusion amount without incurring gift tax....the donor must file a gift tax return to let the IRS know how much of the lifetime exemption is being used, but there will be no gift tax until cumulative additional gifts have exceeded the $5,450,000. Thank you so much for allowing me to help you with your questions. I have done my best to provide information which fully addresses your question. If you have any follow up questions, please ask! If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service as OK, Good or Excellent (hopefully Good or Excellent). Otherwise, I receive no credit for assisting you today. I thank you in advance for taking the time to provide me a positive rating!

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