Jerry Taylor explains why you shouldn't put your house in your child's name while alive. A $150,000 house now worth $650,000 would hit your child with a $500,000 capital gains tax. Use a revocable living trust instead to get a stepped-up basis at death, avoid the tax, and skip probate.
Do not transfer your assets to your kid's name. This is especially true when it comes to your home. Say you bought your home years ago and it was $150,000. Now the house is worth $650,000. If you give that home to your child and put their name on the deed, when they try to sell it, they're going to have to pay the tax on that capital gain of $500,000. Instead of giving them the home while you're alive, put it in a revocable living trust. When you die, they will get your tax basis in that home and owe no capital gains tax, and the home will pass to them outside of Probate court.
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