House

Terry Says

You can gift a house — but think twice before doing this.

First of all, if you gift the house, you’ll need a lawyer to establish a contract, and get title insurance for the recipient.
Second, you might owe capital gains. YOu can exclude $250,000 of capital gains if you own it in your name only, and it has been your personal residence for the past two years. If there is a taxable gain, it could impact your Medicare Part B and D premiums because of the increase in your income from the sale. So consult your tax accountant as well as your attorney.

But if you wait to leave it to someone after your death, there will be NO capital gains. And that person will have the cost basis of the house as the value on the date of your death. But you’d need to make a will or revocable living trust, stating that wish in legal terms.

If you give up your house now, presumably to an adult child, you will lose all the equity in the home — which you might need for care in your later years. So please do not this this is such a smart or easy process!