Are Quitclaim Deeds Reported to the IRS?

Quitclaim deeds are not reported to the IRS when they are recorded. The transfer can still have tax effects that must be reported, depending on the facts.

Gift Tax:

• Annual exclusion: a transfer for less than fair market value is a gift for federal tax purposes. For 2026, the annual gift tax exclusion is $19,000 per recipient.

• Gift tax return: if the gift is worth more than the annual exclusion, the grantor generally must file Form 709. No gift tax is due until lifetime taxable gifts pass the basic exclusion amount, which is $15,000,000 for 2026.

Capital Gains:

• Carryover basis: a person who receives property as a gift generally takes the giver's basis, meaning the original price plus improvements. A later sale can produce a larger taxable gain.

• Step-up at death: property received at the owner's death, such as through a Lady Bird deed, generally receives a basis equal to fair market value at death, which can reduce capital gains tax.

Sales:

If the quitclaim deed is part of a sale, the seller reports any gain on an income tax return. The closing agent may file Form 1099-S.

Mortgages:

If the new owner takes over the grantor's mortgage, the debt relief is treated as an amount the grantor received. That can turn a gift into a part gift and part sale, with possible gain for the grantor. A tax adviser can review the numbers.