Q: I bought a house over a year ago. The deed was recorded in the county land records but I never received the original back from my settlement. Is this a problem?
Kim Villanova, Randallstown
A: Although having the original deed in your possession might make you feel better, it really is of no legal significance.
Maryland is a "race-notice" state. This means that a valid deed that is recorded in the land records in the county where the property is located takes legal priority over all other valid deeds to the same property, even though the first recorded deed might have been validly executed after the later recorded deed.
Thus, while it might be comforting to have the original deed that was recorded back from the record office, a copy of your executed deed with the recording reference and date of recording written on the top of the copy is really just as good legally as having the original.
Q: I recently signed a contract and put a deposit on a house that my wife and I plan on living in for our retirement. The settlement date for the new purchase is April 28, 1995; however, there is no way I'll be able to sell our current home by then. Will I have to pay capital gains tax on the sale of my existing house if I can't sell it by the date of my new house purchase?
Russell R. Vedelia, Frederick
A: First, if you and your wife are both at least 55 years old, then you have a one-time capital gains tax exclusion coming for the sale of your residence of up to $125,000 of your net gain from the sale. Also, if you do not want to take your one-time exclusion, you can defer the entire gain on the sale of your principal residence as long as an amount at least equal to the adjusted sale price of the old residence is spent on the purchase, construction or purchase and improvement of your new permanent residence within two years of the sale of your former principal residence.
The fact that you had to settle on the purchase of your new home before you could sell your existing home should be of no tax consequence as long as you are able to sell and settle on your previous residence within two years.