Welcome and thanks for your question!
Transferring your house to your daughter via a quitclaim deed would be considered a gift as far as the IRS
is concerned. Gifts in excess of $13,000 a year to one individual
a gift tax return
) with the IRS, but most likely you and your wife will not owe any tax on the gift.
Taxes on gifts are payable by the donor not by the receiver. However, as I mentioned above, most likely you and your wife will not owe any gift tax
- First, the IRS allows gift-splitting between spouses. This means that you report half the value of the gifted home on your Form 709 and your wife would report the other half on her Form 709.
- Second, you and your wife can each give up to $13,000 to any individual without paying tax. That means the first $26,000 of the gift to your daughter is not considered a taxable gift.
- Third, he IRS allows taxpayers a lifetime exemption on gifts under a certain amount. In 2012, the lifetime exemption is $5 million. The exemption is on an individual basis, so you and your wife could gift up to $10 million in assets combined.
I'm assuming the value of your home is under $10 million, so based on the above criteria, you would not owe any tax on the gift to your daughter, but would need to file a Form 709 to report the gift to the IRS.
Regardless, gifts are not considered taxable income
to whomever receives them, so your daughter would not incur any tax on you transferring title of the home to your daughter.
Please let me know if you need any additional clarification and I will gladly assist you. If you are satisfied with my answer, please give my answer a positive rating. Thanks and have a great day!