quit claim deed

[family]

May I know if my brother do a quit claim deed to me for his condo for $1.He bought it for $12,000  2 years ago but he never claim depreciation.

Question:-
when the quit claim deed is done,can I claimed for depreciation on the condo basing on cost of $12,000
or basing on $1 ?

I intend to rent out the condo for rental income.

Comments appreciated,thanks

[WilsonTaylor]

You are only allowed to claim depreciation on the value of your basis in the property.  If your brother sells you the property for $1, then your basis is $1 until you put more money into the property.  If your brother sells you the property for $1 over the mortgage of that is on the property then your basis is $1 plus the balance of the mortgage (until you put more money into the property).

HTH

Wilson

[family]

Thank you for your reply.

If I can proof that I have ask him to buy the condo for me while I was overseas/foreigner and that I have paid him the money and he also certify that was true.

Can he now transfer the quit claim deed under my name since I am now back to the states as resident of united states?

Can I claim depreciation base on the purchase price of $12,000 or must I only claimed depreciation based on $1

Hope to hear your comments.

[WilsonTaylor]

If the property has no mortgage, then I would suggest that you have him just sign a quit claim deed.  You can tell your accountant that he gave you the property in lieu of a loan that you had given him for whatever the property is worth.  One word of advice about the depreciation.  Talk with your accountant.  He may owe money on any depreciation that should have been taken if it was an investment property even if he did not take any depreciation.

Wilson

[family]

Wilson,

Thank you for your advice.

Family

[moke]

hi

in most states a quit claim deed is not a sale!!

therefore you can use the buy price to depeciate provided its the first

time. the fact that you paid 1$ for the property is not relavant.

moke

[family]

moke,
Thank you for your reply.

[SD Newbie]

I have to agree with Moke... As a matter of fact, if you quit claim yourself on to the property and quit claim the other person off then it is totally in your name and you can just assume the loan...  

but one question i do have is that i thought you can only take the depreciation on rental property and not your permanent residence...  ???      i could be mistaken though...

[moke]

sb

seems you are correct

the guy might be thinking of the basis when you own!!

first time ive heard of the old quit claiming on and off!! interesting

the question comes to mind if you quit claim how can you dep

if you are not the owner?

moke

[SD Newbie]

the question comes to mind if you quit claim how can you dep if you are not the owner?

I haven't had time yet, but I'll try to research it tonight... Whoever is on the deed should be able to collect the depreciation, but I think it has to be on rental property...