• Skip to main content
  • Skip to primary sidebar

Ask Liz Weston

Get smart with your money

  • About
  • Liz’s Books
  • Speaking
  • Disclosure
  • Contact

Q&A: How gifting property before you die gives your kids a tax headache

February 22, 2024 By Liz Weston

Dear Liz: My wife and I have purchased a few properties over the years and now we would like to give these properties to our children. I’ve read that the best way to gift properties is to wait until we pass away, which sounds terrible. Is there any way to transfer or gift properties without paying a huge amount of taxes?

Answer: Yes, although you’d likely be shifting the tax bill to your kids.

Currently you have to give away over $13 million in your lifetime to owe gift taxes. But if you transfer the properties to your children during your lifetime, they will also get your tax basis in the properties.

That means if they sell, they’ll owe taxes on the appreciation that’s occurred since you bought the real estate. If you bequeath the properties at your death, by contrast, the properties get an updated value for tax purposes and the appreciation that occurred during your lifetime isn’t taxed.

Gifting the properties may still be the right choice, but consider talking to an estate planning attorney and a tax pro before proceeding.

Related Posts

  • Q&A: Ask a tax pro before Roth conversion

    Dear Liz: I’m almost 70, still working, and I’ve got a decent-size IRA as well…

  • Q&A: Estate tax versus inheritance tax

    Dear Liz: In a recent column, you wrote that “only six states … have inheritance…

  • Q&A: Income tax vs. capital gains tax

    Dear Liz: I was wondering about the disabled vet who wanted to sell his home,…

  • Tax refund predators are waiting

    People who don't have much money during the rest of the year can become big…

Filed Under: Inheritance, Q&A, Taxes

Primary Sidebar

Search

Copyright © 2025 · Ask Liz Weston 2.0 On Genesis Framework · WordPress · Log in