Thinking of transferring property to your family members, it is fairly easy in California
To do so in California, you can do it yourself by performing the following 3 tasks:
1. Sign a quick claim deed 2. Notarize the document and 3. Record it with the county.
According to Rocketlawyer.com quitclaim deeds provide an easy process for individuals to transfer their interest in a property to another person. These deeds are sometimes used to gift a property to a relative, charity, trust or friend. The quitclaim process requires no money to change hands. Instead, the property owner owner simply signs a document, which must be notarized and recorded with the county recorder. Once that document has been executed, though, there are tax implications that both parties must take into consideration.
Property Tax Implications
A quitclaim deed is not a means of avoiding back property taxes. If you owe property taxes, the tax must be paid by the person who wishes to transfer ownership. The grantee, or the person who accepts interest in the home, cannot establish clear title until the back taxes have been paid. This is because the tax jurisdiction still has a right to place a claim on the property. Such a claim can nullify a quitclaim deed. If the grantor, or the person who gives up interest in the property, pays the tax due before the quitclaim deed is challenged in court, the grantor still maintains interest in the property. A quitclaim deed also cannot be used to avoid a federal or state income tax lien. Once a grantee accepts a property, he inherits the responsibility of paying the property taxes. The grantor no longer in obligated to pay on the property.
Because no money changes hands during a quitclaim, the Internal Revenue Service applies federal gift tax rules to these transactions. Under the gift tax rules, the grantor must pay tax on the property through a federal income tax return. The recipient of the property is allowed to pay the tax if she agrees to make the payment. Individuals are allowed an exclusion of $13,000. Married couple who share ownership of the gifted property are allowed a $26,000 exclusion. Under these rules, the gift tax is assessed only for the amount of value above the exclusion amount.
Quitclaim deeds are not taxable when they transfer ownership to a spouse. Many quitclaims are done to allow a spouse ownership. This often takes places during a divorce settlement. Quitclaim deeds also are not taxed when they transfer property to qualifying charities. For income tax purposes, you cannot deduct the value of a gift from income tax unless the gift is to a charitable organization. IRS Publication 950, Introduction to Estate and Gift Taxes provide many examples of how the gift tax rules are applied to various situations.
Please be sure to consult your accountant and lawyer for the tax and legal implication prior to the actual transfer.