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    joglad's Avatar
    joglad Posts: 1, Reputation: 1
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    #1

    Jun 17, 2009, 10:42 PM
    Do I lose my homeowner tax deduction w/a Quitclaim deed?
    I own my home and the lot on which it is built. I want to add my daughter’s name to the title. I’ve hired a lawyer and I drew up a draft for a Quitclaims Deed by which I would deed the property to myself and my daughter. My lawyer says that by doing that, I would lose my homeowner tax exemption because, he says, the owner must reside on the property to benefit of the exemption. Fact is that I, one of the owner’s would keep on residing on the property and my daughter and husband live in their own home. Is there a way around that?
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
    		  
    #2

    Jun 18, 2009, 05:42 AM

    First it would help to know where you are since this is governed by state law. Or are you referring to your ability to deduct real estate taxes and mortgage interest on your tax return?

    Second, what is your purpose in adding your daughter as a joint owner?

    Third, if you have a mortgage, you need to consult your lender. Almost all mortgages have a due on sale clause and any change in ownership can trigger this clause.

    Finally, as noted, almost any change in ownership is considered a sale. Essentially you are selling a half interest in your home to your daughter. Unless she pays fair market value for that half, this sale will constitute a gift and you will be responsible for gift taxes.
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