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What tax is due when a parent quit claims a property to their child?

August 9, 2004


From:  Keith
Date:  Fri, 9 Jul 2004
Subject:  Quit Claim and Property Taxes

What tax is due when a parent quit claimed a California rental property worth $500,000 to a son in 2003?

Answer

Date:  Fri, Jul 30, 2004

Hello Keith,

This is a taxable gift. The tax depends on how much of the lifetime exemption equivalent was used before the gift. The lifetime gift tax exemption is $1 million. The transaction is reported on Form 709.

Remember to claim the exemption from reassessment for a change of ownership for a transfer from a parent to a child. Call the county assessor's office in the county where the property is located for the form and instructions.

Good luck!
Mike Gray

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IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained on this website was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.

What tax is due when a parent quit claims a property to their child?

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