Real Estate transfers occur either by sale, trade, gift or at death. The income tax impact differs in each instance. I need to note at the onset that my Capital Transactions textbook at the University of Denver tax school was about 3 ½ inches thick. So, this summary is not intended as an exhaustive explanation of all tax considerations. It is only intended to identify the major distinctions between the four types of transfers.
Imagine buying a piece of property and starting renovations. Things are going well until your neighbor serves with you with a cease-and-desist order. Apparently, your renovations have spilled over onto his property. However, according to the survey you had performed prior to the purchase, you are well within the boundaries of your property.
No matter who you are or what part of Washington you live in, there's a good chance that you share a property boundary with at least one other person.
Individual land ownership is at the heart of a free economy. However, it's not always easy to figure out where property lines lie. Even the most advanced surveying equipment or detailed parcel descriptions can leave room for doubt. These gray areas sometimes lead to bitter disputes between neighbors.