Q: Several years ago my father deeded his home to me and two of my siblings. Our understanding was that he would pay the real estate taxes and the insurance premiums. The mortgage on the home has been paid off for some time, and my father still lives in the house.
We’ve just found out that my father has not been paying the taxes on the house and back taxes are owed. Because the house is in our names, the tax office is coming after us. My siblings and I want out, and want to do a quit claim deed back to our father.
My question is will this relieve us of the back tax responsibility? Or will we still be responsible for the back taxes owed?
A: Once you accepted the property from your father you and your two siblings became owners of the home. Now that your father stopped paying the real estate taxes on the property, it’s up to you and your siblings to pay those taxes or lose the property.
Doesn’t the property have some value to you and your siblings? If you and your siblings don’t pay the taxes, you stand to lose the property. Of course, if your father has the money to pay the taxes, he could. But if he doesn’t and you don’t, the property can be sold out from all of you and someone else will become the owner of the property.
Your father will lose a place to live and you and your siblings will lose whatever value the property has. If the property has value, you could sell the home to pay the taxes off and then distribute the proceeds from the sale. However, you seem to be in a delicate position. Your father gave you the property with the understanding that he would pay the taxes. But he did not pay those taxes. What reason does your father have for not paying those taxes?
If your father failed to pay the taxes due to ill health or financial problems, it would seem that he did not mean you and your siblings harm. You could try to help him out and pay the real estate taxes that are owed. Eventually, when you sell the property, you and your siblings will get the benefit of the gift that your father gave all of you. If the home has appreciated in value, you will all have some money to show for keeping the property and later selling it.
You’ll need to sit down with your father to discuss the issue of non-payment of taxes and what his financial expectations are going forward. If the property is unaffordable for everyone, then selling it might be the best solution.
Sept. 19, 2008.
My father died in 2009 and did not leave a will. My siblings and I are co-owners of our family home. Back taxes are owed because my siblings failed to help pay annual taxes. My question to you is if my siblings give up their legal rights to home to me and I pay back taxes, can I claim or file back taxes on my income tax return?