capital gains on real estate

[atulagarwal_92128]

I helped my son purchase a property. Instead of paying off the loan to me, he transferred the house back to me through a quit claim deed. I subsequently sold the property to recover my money and made some profit. I did not hold the property for one year before selling it. While paying tax on the profit, do I pay capital gains or the date of purchase will be when my son bought it? 

[TomD8]

When you receive a home via quitclaim, the previous owner's cost basis (his original cost plus the cost of any capital improvements he may have made to the property) becomes your cost basis.

[tagteam]

@atulagarwal_92128 

Your cost basis is more complicated than simply a carryover basis from your son since there was consideration for the transfer (i.e., the payoff of the loan). 

Also, a quitclaim deed is no different than most other forms of deeds that can effect full transfer of title to real estate, such as a warranty deed, for federal income tax purposes.