What Are the Tax Consequences of Adding a Domestic Partner to a Deed?

Full Question:

I am adding the name of my domestic partner to my property deed in pennsylvania. The home is worth about 250K. What are the tax implications?
04/28/2011   |   Category: Taxes   |   State: Pennsylvania   |   #24737

Answer:

The answer will depend on whether the transfer is a gift and if not, how much is being paid for the property interest. If it is a gift, it is possible gift taxes may be owed, depending on the total value of gifts made during the year. We suggest you consult a tax professional who can review all the facts and documents involved. Pennsylvania realty transfer tax is imposed at a rate of 1 percent on the value of real estate (including contracted-for improvements to property) transferred by deed, instrument, long-term lease or other writing. Both grantor and grantee are held jointly and severally liable for payment of the tax.

Pennsylvania realty transfer tax is collected, often along with an additional local realty transfer tax, by county Recorders of Deeds. The Recorders of Deeds remit the commonwealth's 1 percent to the Department of Revenue, and the locals have the option to share their realty transfer tax among school districts and municipalities.

Some real estate transfers are exempt from realty transfer tax, including certain transfers among family members, to governmental units, between religious organizations, to shareholders or partners and to or from nonprofit industrial development agencies. Deeds to burial sites, certain transfers of ownership in real estate companies and farms and property passed by testate or intestate succession are also exempt from the tax.

See also:

http://www.pacode.com/secure/data/061/chapter91/subchapItoc.html
http://www.pabulletin.com/secure/data/vol37/37-50/2306.html
http://www.irs.gov/publications/p523/index.html