An investment property has a title of a partnership company - (not an LLC) - A mortgage company wants to refinance the investment property, but the lender will only allow the title to be in the owners of the company's name, not the business name. This allows for transfer tax fees required by the state. The partnership is owned by father and son. Does changing the name on the title to the owners names mean they have to pay a capital gains tax now? There is no sale. It is in their company's name now and they would just put it in their personal names to take advantage of a low residential investment propery rate instead of a commercial rate. (difference of about 3 points - i.e.6.25% as compared to 9%) They would do a quick claim deed to put back into the companies name and pay the transfer tax again to get the tax breaks a business would have. Between the 2 properties, it would cost $20,000. The difference between the residential investment mortgage rate and commercial rate between 2 buildings would save them over $350,000 in interest over 30 years. The important question would be, would they have to pay capital gain tax here?

Optional Information:
Nashua, New Hampshire

Already Tried:
nothing - was informed by client they would have to pay capital gains tax