Is it legal to sell your house to your spouse ? Asuming mortgage is paid off and we want to make our primary home as a rental property.

Asked by Akhia, Piscataway, NJ Wed Mar 16, 2011

We would like to keep the house and put in on rent. We just want to avoid the taxes on the already appreciated property after putting it on rent(for more than 3 years). We have stayed in the house for more than 2 years and there is considerable appriciation in the house value.

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Aaron Ruben, , 34236
Thu Mar 17, 2011
Like everyone else I am going to start by recomending that you speak with a local attorney. One thing that you may want to consider is doing a "quick claim deed." This would allow you to transfer the deed without actually "selling" the property. Again, meet with a local attorney and ask him/her about that concept.
I hope that this helps.
Aaron Ruben
Coverstone Realty, LLC
0 votes
Nanda Joshi, Agent, Edison, NJ
Thu Mar 17, 2011

It's best to speak to the lawer and/or tax accountant to assess your specific situation, since the ramifications are significant.

Having said this, I was involved in the very similar situation of swapping Primary residence into investment property, with capital gains tax in mind. I could share my personal experience with you.

Nanda 732 690 8165
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Anna M Brocco, Agent, Williston Park, NY
Wed Mar 16, 2011
Since you are asking a legal question, for accurate advice do consult with an attorney who specializes in real estate before considering such a sale; he/she can best advise as to any legalities, ramifications, etc.
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Kate Reilly…, Agent, Edison, NJ
Wed Mar 16, 2011
Be careful of having it rejected as "Fraud" if you are transferring the ownership to gain a legal status. Get your Attorney to advise you. If you are trying to protect some debt or tax benefit it could be reversed and cost you additional money.

In divorce situations a house is commonly sold to one of the spouses as settlement. Homes are commonly transferred to other family members in an estate situation. Just have good advice if you are trying to avoid a tax issue
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Tim Moore, Agent, Kitty Hawk, NC
Wed Mar 16, 2011
Currently you must live in a house 2 of the last 5 years to make it count for cap gains exclusion so as long as you sell it in 5 years, and they don't change the law, you should be able to avoid some or all cap gains. There are limits so speak to a tax advisor.
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