Legal Question in Real Estate Law in California

Re: gift tax

There is a $1 million lifetime gift tax exclusion, but the donor is generally limited to giving $12,000 per year to individual donees without gift tax liability. Giving away more than $12,000 of current value per donee will probably subject the donor to gift tax.

Giving away houses during the donee's lifetime is usually not the best idea for several reasons, including gift and capital-gains taxes. Houses should be inherited for best overall monetary results for the heir, and this can be done by will or, better yet, a living trust because this bypasses probate.

Gifts bypass probate, but not the tax collector - there is a double bite, gift and capital gains.

An estate-planning attorney can give you particulars and show you the savings based on your particular numbers for purchase price and current market value.