Someone is our family filed a quitclaim deed stating that they paid us 700,000.00 for the purchase of a home. They never paid us anything but they since they paid the conveyance tax and the sell was recorded. Are we liable to pay the capital gains tax on a house that we never received any money for?

What can we do short of suing them to have the deed they filed rescinded?

They obtained the signature for the deed under false pretenses and they added the amount for the sale in after the fact.

Seeing as your explanation involves a considerable amount of money, personal property and defamation of character, I suggest you find a lawyer and get a police report or something similar filed because it seems to be that this is a good case for fraud. Suing them is the least of it; obviously everything they did was premeditated.

Talk to a lawyer.

I don't know what state you are in but I once represented, pro bono, a man whose sisters had represented that they lost the title to their parents house and they were the sole heirs, and there was no will (there was and they weren't) effectively cutting him out of their sale of the house (he didn't want to sell which is why they did it).

He had to produce a copy of the will of his parents that left the property to him and his sisters. The will had never been probated because they didn't know what that meant but the title insurance company took it as evidence that he had been duped out of his inheritance. He had a fraud case against his sisters which he refused to file and we worked it out with the title insurance company fairly quickly and painlessly. But I don't think he would have gotten anywhere without a lawyer.

See a lawyer... this sounds serious.

Tickle's right, your first stop should be either the police or local prosecutor. This does appear to be a case of fraud which is a criminal offense. They will have to prove you received the money. If they can't, they can be prosecuted.