Quitclaim deed tax or the deed with no guarantees, are commonly used simply in special situation like removing a cloud from the title, during the time selling the tax deed or for transferring between members of the family, especially in divorce.
Yet, there could be advantages of tax of using deeds of quitclaim, especially if they give the property as a present. Quitclaim deeds simply convey the rights of the grantor, if any, inside the property.
There would be no ownership guarantee or warranty and the rights of the grantor or the property are not stated definitely. These deeds are contrast directly to the common general warranty which comes up with many guarantees, like the right of conveying the property as well as protection defected of the title.
When someone quitclaims another person for a deed, he would not responsible for the property taxes annually payment of the property. The other people who have the deed of quitclaim are now having responsibility of property taxes.
When a person as the donor or the grantor quitclaims the deed with no taking any money of the quitclaim deed tax, it is considered the transfer gift. If the property amount is worth less than about $13,000, the grantor must not pay the tax of the gift and would be exempt.
Another option is when a gift is above $13,000, a grantor still may be exempt of tax payment through the exception of federal lifetime that is above $1,000,000.
The quitclaim deed will simply transfer the rights or the interest of the grantor; it does not mean the grantor would be free of any liens related with a property. For instance, if the wife and the husband together own a house, then the husband at divorce quitclaims the rights of the house toward the wife, he would no longer own interest of the property.
It means, when the wife sells the house and runs out, the husband would not be entitled to anything gained from selling the house. Yet, when the wife has been failed about the mortgage of the house, the husband still would be responsible financially for it since his name is still written on the quitclaim deed but instead simply is not written on the property right.
That is all the advantages of quitclaim deed tax.
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