Legal Question in Tax Law in Pennsylvania

This really depends on the state you live in, your parent's net worth and the tax laws. Some states do not have inheritance taxes. If your parents died in 2010, there would be no federal estate tax. In 2009, only assets in excess of $3.5 million were taxed. in 2011, that amout is supposed to revert to $1 million, though a new tax law is expected.

If your parents give you their house now, your basis in the house would be their tax basis (probably what they paid for it). So, if you sold it, you would have capital gain on the difference between the purchase price and the low basis, unless you fall under the the exception for the sale of your primary residence. If they died in any year other than 2010, the basis would be the value on the date of death, so there would be very little if any capital gain.

There also may be transfer fees/taxes to consider in your state.

I strongly recommend that you talk to an estate planning attorney. Feel free to call me for more information.