I bought a home and put my parent on the deed. My parent never lived there or paid towards it. now, I want to take my parent off the deed. do I have to pay a gift tax?

[JessicaF2]

when I bought my home I put my parent on the deed - not the mortgage.  now that I take my parent off the deed do I or they have to pay a gift tax?  they never paid anything for the house

[DoninGA]

They would just provide a quitclaim deed to your city/county to remove them from the title.  No funds would pass to them since the home is not being sold.
You are not gifting anything to your parent.

[Opus 17 · Accepted solution]

On paper, it may look like they are giving you a gift of equity (they are "giving" you their half of the house).  But in reality, they are not giving you anything if they did not have an actual stake in buying the home in the first place.

A gift tax return is required for gifts more than $15,000 per person per year, but actual gift tax is rarely owed unless the person has made more than $11 million of gifts in their lifetime.  

If you want a definitive answer, you may want to consult a tax attorney.  I would suggest that your parent does not need to file a gift tax return to report the gift of equity, but you will want to keep documentation relating to the purchase and quit claim deed for at least 6 years, and preferably as long as you own the home plus 6 years after that (just in case of IRS questions). 

[JessicaF2]

perfect! thanks