Quitclaim deed vs gift deed
A gift deed is a quitclaim deed that says out loud that nothing was paid. That one recital matters more than it sounds: it supports a transfer tax exemption in most states and documents the donative intent for the IRS.
| Quitclaim deed | Gift deed | |
|---|---|---|
| Transfers ownership | Yes | Yes |
| Title warranty | None | None |
| States the consideration | Usually nominal ('$10 and other consideration' | Explicitly none) 'love and affection' |
| Supports a gift tax exemption | Weaker | Stronger. The intent is on the face |
| Typical use | Any transfer between trusted parties | An outright gift with nothing received |
| Deedly price | $39 | $39 |
Why the recital matters
- Transfer tax. Most states exempt transfers with no consideration, and the assessor reads the deed to decide. A deed reciting '$10 and other good and valuable consideration' invites a question that a gift deed does not.
- Gift tax. A gift over the annual exclusion needs IRS Form 709. Having the intent stated on the recorded instrument supports the filing.
- Later disputes. If someone later claims they paid for the property, a deed that says 'love and affection, and no monetary consideration' is contemporaneous evidence they did not.
- Medicaid. A gift within the five-year look-back can create a penalty period, and the deed's own language is what a caseworker reads.
Do not describe a sale as a gift
Reciting a gift on a deed where money actually changed hands is transfer tax evasion, and it can also void the buyer's title insurance. If money moved, say so.
Which to use
- Gift deed. You're giving property to a child, a relative, or a charity and receiving nothing.
- Quitclaim deed. Adding a spouse, removing an ex, funding your own trust, moving property into your LLC, correcting an error. All transfers where 'gift' does not describe what is happening.
$39 either way. The interview asks what is being paid and picks the right recital.
Common questions
Mechanically almost identical, both transfer without warranties. The difference is the consideration recital, which is what supports the tax exemption and documents intent.
The giver may need to file IRS Form 709 for a gift above the annual exclusion, though tax is rarely actually due because of the large lifetime exemption. The recipient pays no income tax, but takes the giver's cost basis, which can mean a large capital gains bill later. More on that.
No, once delivered and accepted. That is what makes it a gift. If you want to keep control while you live, use a transfer-on-death deed or a lady bird deed instead.
Keep reading
Deedly is not a law firm
We provide self-help software and state-specific statutory forms; you make your own decisions about your property. Using Deedly does not create an attorney-client relationship, and nothing here is legal advice. If your situation is complex or contested, talk to a licensed attorney in your state.