Quit Claim Deed vs Sale of property?

Question

My Uncle wants to give me 2- lots of land in AZ. He wants to sell the property to me but not require me to pay anything. From what I read, he could do a quit claim deed to transfer the property to me. Is there any reason he wouldn't want to do a quit claim deed? What are the tax implications for him and me?

Answer 1

If he has a valid abstract of title and a full warranty deed to the property, then he should issue you a warranty deed.

A quit claim deed is not necessarily for a gift. It transfers whatever right, title and interest in the property he may have to you. I can legitimately issue you a quit claim deed to all of New York City. The fact that I personally have no right, title or interest to the property is irrelevant.

Perhaps the best thing to do is to have another deed written in which he deeds the property to both himself and you with right of survivorship. The last of you surviving then owns the whole property. If he gives it to you, there are serious tax implications.

Answer 2

Transferring property from one deeded owner to another person requires a deed. There are three types:
1.) Warranty Deed - This deed not only conveys all of the owner's interest but carries warranty covenants that provide you with the warranty that if any defects of title are found then the owner will defend the title they provided. However you should also order a title binder/committment of Insurance since sometimes the person warrantying the title has no resources to carry out the warranty. This is the best type of conveyance that you can receive
2.) Special Warranty Deed - it is the same as a warranty deed with the exceptions that the warranty to protect the title being conveyed are limited and not general in nature as the Warranty Deed. Next best type of conveyance you can receive
3.) Quit claim Deed - this is a deed that is commonly used for ascertaining that the neighbors don't own any of your property in where you create a deed showing your property and the neighbors sign it giving any interest they have in your property to you. In effect it conveys the title to a property by a grantor if, and heavy emphasis on the if, they have any title to begin with, it carries no warranties expressed or implied. Worst kind of conveyance you can get.
Certain states also require as part of the conveyance that certain disclosures and other types of forms be filed when a conveyance is done. To find out if Arizona has those types of requirements you can go to http://www.realestateformnm.com/researchindividual.aspx and go to the state of Arizona links and or contact a real estate attorney in your area.
Best of luck to you

Answer 3

1

Answer 4

A quit claim deed will not transfer ownership to you unless you are already a co-owner of the property with your uncle, and then he releases any ownership interest via quit claim deed, making you the sole owner. Thus he has to 'sell' (transfer) the title of the property from his name to yours.

You, of course, will assume the liability of any property tax on these parcels. Your uncle should consult with a qualified accountant on the best way to financially turn these properties over to you. If there is substantial value to the properties, he may well trigger a gift tax if he gives more than $12,000 worth of these properties to you in any given tax year.

Answer 5

Why oh why people insist on not using General Warranty Deeds...I have no idea...Quit Claims give you the LOWEST legal protection known to real estate law.

Have your uncle sell you the property for $1.00 and file a General Warranty Deed, and do it RIGHT!

Answer 6

You need to talk to a local real estate attorney to be sure. If he sells it to you for $1, you probably won't have to pay taxes because you bought it and it wasn't given to you. If he signs a quitclaim deed, it may be considered a gift and therefore income and therefore taxible to you and/or him.

But talk to a lawyer. At least they're good for something.