[WSBARP] A *complicated" Quitclaim Deed situation.

[John J. Sullivan]

Carol:

For tax purposes are these resident or nonresident aliens? Generally the latter are treated the same as U.S. citizens. So a gift tax would presumably have to be filed. Also, the step up on basis the surviving spouse would receive on death would be lost. 

https://www.jdsupra.com/legalnews/us-tax-basis-inherited-from-foreign-46773/

As for legal authority to transfer the sick husband’s interest, you don’t say which jurisdiction the POA (presumably durable) is governed by and whether the husband possesses legal capacity. 

If he lacks capacity and the wife has a DPOA from him, there has to be a specific gifting provision of adequate scope. Look for a provision about gifting to the AIF. Is there an alternate? Can the wife resign and enable the successor to make the conveyance?

Why make the conveyance and lose the step up in basis, incurring the cost of filing a Form 709?

John J. Sullivan

Sent from my iPhone

> On Jul 7, 2021, at 7:25 AM, Andrew Hay <andrewhay at washingtonlaw.net> wrote:
> 
> 
> Complicated indeed!  Title companies are wary of POA transfers to the POA and sometimes will not insure the downstream transaction.  It would be helpful if the POA had a specific provision allowing gifts.  Our title folks may chime in on this but it is a concern.
>  
> It almost seems better to wait until H passes and then do a Lack of Probate Affidavit to transfer title.  That preserves the stepped up basis – assuming foreigners are entitled to it.
>  
>  
> Andrew Hay
> Hay & Swann PLLC
> 201 S. 34th St.
> Tacoma, WA 98418
> www.washingtonlaw.net
> andrewhay at washingtonlaw.net
> He/him/his
> 253.272.2400 (w)
> 253.377.3085 (c)
> THIS IS A CONFIDENTIAL COMMUNICATION AND IS INTENDED FOR THE DESIGNATED RECIPIENT ONLY.  IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY THE SENDER IMMEDIATELY AND DESTROY ALL COPIES
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>  
>  
> From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Roger Hawkes
> Sent: Tuesday, July 6, 2021 5:47 PM
> To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
> Subject: Re: [WSBARP] A *complicated" Quitclaim Deed situation.
>  
> One probable consequence is loss of the stepped up basis; i say ‘probable’ because I don’t know if foreigners even qualify for that☹
>  
> From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Carol Li
> Sent: Tuesday, July 6, 2021 5:37 PM
> To: wsbarp at lists.wsbarppt.com
> Subject: [WSBARP] A *complicated" Quitclaim Deed situation.
>  
> Hope everyone had a fantastic holiday weekend! 
> Drafting a QCD should be one of the easiest tasks, but I am running into a complicated one here. PC and her husband own two properties in WA. They are both Canadians. Now the husband is sick(very sick) and PC has the POA. PC is seeking legal help to transfer the properties to her own name only. I immediately thought of using quit claim deed to transfer the title as gift under WAC REETA exemption. Now two questions pop up: 1. Can PC sign as grantor on behalf of the husband to gift half of the title to PC? (It sounds almost like conflict of interest or PC taking advantage of her sick husband?) And 2. As Canadians/foreigners, does the husband need to file federal gift tax certificate or is there any other federal tax consequences ...
> Thank you in advanced!  
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