Tax question

[progree]

6. Here's another: quit claim deed vs. transfer on death deed

http://www.thinkglink.com/2013/03/23/transfer-death-deed-vs-quit-claim-deed-difference/

In a quitclaim deed, your mother conveys to you and your sister her interest in the property. After the quitclaim deed is filed, your mother would no longer own any part of the home. That’s because she conveyed title to you. That quitclaim deed would essentially transfer all of your mother’s interest and ownership in the home to you and your sister.

... the quitclaim deed that transfers ownership would transfer that ownership at the time the deed is given to the new owner and recorded. For federal income tax purposes, the transfer date would trigger any tax issues.

It all makes sense until the first two of the last three paragraphs. I thought it was clear that the quit claim deed transfers ownership right now (there's no "on someone's death" ). But then the 3rd to last paragraph goes gobbledy gook on me:

In a quitclaim deed situation, the new owner takes title with the cost basis that the owner had on that property. If the owner’s basis was $50,000 and the property is worth $150,000 at the time of that person’s death, the new owner would have a basis of $50,000. And if that person sold that property for around $150,000, that person would have a profit on the sale of about $100,000 even though the new owner might have only owned the property for a very short period of time and the property never appreciated during that time of ownership.

What's this "at the time of that person's death" doing in there? Sigh. Nothing in what they explained about the quitclaim deed up to that last paragraph has said anything about someone's dying being relevant to anything. I suspect that since this article discusses both quitclaim deeds and transfer-on-death deeds, the author might have momentarily lapsed into confusing the two, but then, how trustworthy is any of the rest of the article?

As for the "transfer on death deed", it sounds like just what it says -- it's like naming someone on a will but with the enhanced benefit of trying to avoid probate:

The owner could name the heir of the property in a will, but the intended beneficiary would have to wait for the court in probate to issue a deed to transfer title from the deceased owner to the intended beneficiary.

In an attempt to avoid probate court, the transfer on death instrument would take effect on the death of the owner of the home