A home's tax valuation differs from the market value

Q. We are getting ready to sell our house. We bought it in 1967. Our tax bill says it's worth $260,000. Is that how much we should ask for it? Should we hire an appraiser? What if our Realtor advises us to sell the house for some other amount?

A. You shouldn't use your tax-assessment figure as your asking price, and you don't need a professional appraiser at this point.

Local real estate brokers will analyze recent nearby sale prices ("comparables") and consider how those properties compare to yours. It's prudent to interview more than one agent before you list your home. Each agent will suggest an asking price.

Right now, those are the most reliable estimates of market value.

Q. I am going to sign a quickclaim deed. I need to know what my expenses will be and how it will affect my income tax return?

A. A deed transfers the signer's ownership of real estate to someone else. States have various kinds of deeds. A full-warranty deed, for example, includes a guarantee that the signer owns the property free of competing claims.

A quitclaim deed is simpler, which is why some refer to it as a "quick" claim. It just transfers (quits) any ownership the signer has to someone else. Quitclaims are often used in family transfers and divorces.

Your expenses will depend on the type of transaction. If this is a gift transfer there will be minimal fees to cover drawing up the document and entering it in the county's public records. A gift-tax entry on your tax return may be necessary, but there probably wouldn't be any actual federal tax due. State gift-tax laws vary.

If you are transferring the property to charity, income-tax deductions should be available.

If, on the other hand, you are selling the property, a transfer tax is included as a closing expense in most states. Any profit or loss from the sale would be reported on your income tax return in normal fashion. If the property is your own longtime home, you might be eligible for a home-sale income-tax exclusion.

So, as the lawyers say: It all depends.

Q. I am an attorney, and I must say your concern about timeshares having different resale values across the country is unnecessary. The reality is that 99 percent of timeshare owners have a zero percent chance of selling their timeshare. Really, the only options available these days are:

• Pay a significant fee to have an entity, such as the resort, take the timeshare off the owner's hands.

• Simply default and walk away.

In normal circumstances, a default would cause the timeshare resort to foreclose on the unit, take the title back and then resell it. This is all well and good, except that the resorts can't resell foreclosed units either, so they opt to do everything but foreclose them (to keep the yearly fees coming).

A small percentage of timeshare owners who default end up with a derogatory entry on their credit. If the owners are elderly and don't need credit to buy a house, I might say, "Big deal. Stop paying the $1,000-plus yearly fee.'' In my experience, most timeshare companies choose not to pursue negative credit reporting, as it doesn't put any dollars in their coffers and it creates negative publicity.

Some states allow resorts to continue billing the yearly fees to former owners. It is most disgraceful.

I can appreciate your concern about advising on this issue on a countrywide basis. These predicaments are indeed countrywide. There is so much misinformation out there. I also applaud your willingness to educate folks about the importance of not paying fees in advance for a sale that likely will never happen. This is entirely sound advice.

A. Timeshares should be bought for use and enjoyment, not for investment purposes. As you said, my column appears across the country, so I hesitate to make too broad a statement on the subject. I should probably stay off this matter entirely, but I do like to warn people not to pay a sales commission in advance.

I often advise readers in this position to ask a lawyer what would happen if they were to stop paying fees or property taxes. If the reader's timeshare is in another state, most of the time nothing happens. Occasionally, though, a delinquent owner's credit rating is affected. That's why I try to shift responsibility to a lawyer who knows whether a credit hit matters to a particular client.

• Contact Edith Lank on www.askedith.com, or 240 Hemingway Drive, Rochester NY 14620.

© 2016, Creators Syndicate