While quitclaim deeds offer a faster and easier way to transfer property in Alabama, they come with associated costs. Before transferring property, it’s important to factor in these taxes.
Filing Fees
A quitclaim filing in Alabama is subject to a recording fee, also called a deed tax. The county will assess $.50 per every $500 of property value when you file your quitclaim deed and associated documentation.
Taxes
Quitclaim deeds may also be subject to the following taxes:
1. U.S. Gift Tax (Form 709)
Alabama has no gift tax, but the federal government enforces one (Form 709) when the property is given without monetary exchange.
This tax only applies when the value of the gift exceeds a certain limit. Since this value changes annually, you should review federal gift tax requirements when tax season comes.
2. Capital Gains Tax
Depending on your income, filing status, and property value, you may pay a state or federal tax on Alabama quitclaim deeds. Tax rates can vary, so you benefit from reviewing tax laws or consulting with a tax professional before you file.
Since capital gains are taxed as income, you file these taxes when you report your annual income tax return.
