You are only allowed to claim depreciation on the value of your basis in the property. If your brother sells you the property for $1, then your basis is $1 until you put more money into the property. If your brother sells you the property for $1 over the mortgage of that is on the property then your basis is $1 plus the balance of the mortgage (until you put more money into the property).
If I can proof that I have ask him to buy the condo for me while I was overseas/foreigner and that I have paid him the money and he also certify that was true.
Can he now transfer the quit claim deed under my name since I am now back to the states as resident of united states?
Can I claim depreciation base on the purchase price of $12,000 or must I only claimed depreciation based on $1
If the property has no mortgage, then I would suggest that you have him just sign a quit claim deed. You can tell your accountant that he gave you the property in lieu of a loan that you had given him for whatever the property is worth. One word of advice about the depreciation. Talk with your accountant. He may owe money on any depreciation that should have been taken if it was an investment property even if he did not take any depreciation.
I have to agree with Moke… As a matter of fact, if you quit claim yourself on to the property and quit claim the other person off then it is totally in your name and you can just assume the loan…
but one question i do have is that i thought you can only take the depreciation on rental property and not your permanent residence… ??? i could be mistaken though…
I haven’t had time yet, but I’ll try to research it tonight… Whoever is on the deed should be able to collect the depreciation, but I think it has to be on rental property…