As you prepare your quitclaim deed, you should also plan to pay all transfer fees and taxes relevant to Wisconsin grantors.
Filing Fees
The filing fee is usually around $30. For example, Dane County, Sauk County, and Marathon County all assess a $30 recording fee regardless of the document’s number of pages. They also charge specific fees for copies ($2 for the first page, $1.00 for each additional page, and a $1.00 certification fee if they want a certified copy).
Each county sets its fees, so it’s important to check with your county before proceeding.
Taxes
1. Transfer Tax
The Wisconsin transfer tax is 30 cents on every $100 or a portion of $100 of the value of the property (Wis. Stat. § 77.22). You can also consider the transfer tax as $3 for every $1,000 in property value.
Who Pays the Transfer Tax?
Wisconsin requires the grantor (the property seller) to pay the transfer tax fee.
Exemptions to the Transfer Tax
Wis. Stat. § 77.25 lays out several exemptions to the transfer tax. These include:
- Conveyances made before Oct. 1, 1969.
- Property transfers from the US government.
- Corrections to current deeds.
- Properties sold for delinquent taxes or assessments.
- Transfers due to mergers of entities.
- Transfers from a subsidiary corporation to its parent corporation, or vice versa.
- Transfers between parent and child, including stepchildren or in-laws, for nominal or no consideration.
- Transfers between spouses.
- Transfers between domestic partners.
- Transfers from trustee to beneficiary without consideration.
- Transfers by will or non-probate transfer on death.
If you have questions about whether your property transfer falls into these categories, consult an accountant or tax professional to better understand the most advantageous way to transfer your property.
2. US Gift Tax (Form 709)
The US government assesses a gift tax on gifts with a significant monetary value. It applies when the grantor transfers the property to the grantee for no consideration, meaning the grantee doesn’t pay for the property or exchange other property of approximately equal value during the transfer.
The IRS establishes an annual exclusion per donee for each year. The limit for 2024 is $18,000, so you can give up to $18,000 per recipient without paying tax. Please fill out Form 709 to report any transfers subject to this tax.
3. Capital Gains Tax
Wisconsin taxes capital gains as ordinary income, ranging from 3.50% to 7.65%. A 30% deduction may apply if the grantee receives the property from someone who passed away, while a 60% deduction may apply if the transfer involves the sale of farmland (Wis. Stat. § 71.05(6)(b)9).
Federal capital gains tax will also apply under Topic No. 409. Short-term capital gains tax (tax you owe after capitalizing on property you’ve had for less than one year) may range between 10% and 37%. Long-term capital gains tax rates can be 0%, 15%, or 20%, depending on your filing status.
