Many people are under the false assumption that when they pass their loved ones will receive a large tax bill in the mail. This doesn’t have to be the case. To avoid probate many will gift their real property directly to their loved ones.  There are reasons why you may not want to directly give the property ought right to your loved ones. If you gift the property outright, you lose full control over the property; you can no longer make decisions for the property. The person who receives the property can sell, mortgage, or rent the property without your consent.  Another thing to consider is the tax ramifications of gifting property. 

 

If you gift your property to your loved ones outright, prior to your passing, your loved ones will receive what is called a Gift Basis in the property. The Gift basis will be the same basis that you have on the property. For example, If you bought a house for $100,000 then your basis on the property will be $100,000.