Two non-married people on title (Joint) of a home in CA which is their primary residence.
One party intends to remove themselves from the title/transfer title to the other party.
Is this a taxable event to the person remaining on title/receiving the transfer?
If the purpose of the Conveyance is for compensation for money owed, does that make this a taxable event to the recipient of the conveyance?
If the purpose of the Conveyance is for compensation for money owed, does that make this a taxable event to the recipient of the conveyance?
money owed for what reason. please provide as much specifics as possible.
it could be completely non-taxable - no gift tax return required, completely non-taxable - gift tax return required, completely taxable, or even partially taxable. the facts matter.
Thanks for the response.
The party receiving the title is a licensed attorney who has been providing free legal services for his partner whom he is on title with. The case has impacted his private practice, and thus his partner has offered to transfer the house to him as compensation. The assessed value of the home is $1.1M, and there is approximately $650,000 in equity in the home.
Thanks again
I would deem this a taxable sale by the person giving up title. since there is no cash received the offset would be legal expenses. depending on the nature of the legal services they may or may not be a tax deduction. some might disagree with this conclusion. however, certainly the person receiving the title has compensation. it's not a gift because the transfer was to compensate for free legal services rendered in the past. but now he has additional basis in the house equal to the value transferred. a non-tax issue is will the title transfer affect the mortgage.