Can you give real estate to another family member?

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Can you give real estate to another family member?

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Ummmmmm, yeah.

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Assuming the property is paid off.

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Irrelevant to your question

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Is this legal

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Yes

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how much would the transfer of ownership cost at closing?

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Depends, consult a real estate attorney. Lot of variables to give you a set answer.

You could "sell" it to them and close as quickly as the title company can exchange title work. That sale price can be whatever you decide it should be.

Closing costs should be less than $1,000

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You'll have to pay a gift tax if it exceeds a certain amount...last time I looked it was on the value over $14k but it goes up every year so I'm sure it's higher now.

Decide to use the google:

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The annual exclusion for 2014 and 2015 is $14,000.

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Pretty sure that just deducts from your lifetime gift donation of like $5m. So if the home value is 314,000. You get the 14,000 exemption for the year, and then the remaining 300,000 goes against the $5m lifetime exemption. So you'll only be able to donate another $4.7m to that person before actual taxes need to be paid. (These figures are just an example. Not accurate.)

Someone will have to correct me if any of this is wrong.

I used google again and I'm right since we're talking about a single gift and not a lifetime gift (or maybe I'm wrong in that I don't fully understand what the OP is proposing):

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The gift tax is tied to the estate tax, so the inflation indexing helps the wealthy make the most of tax-free lifetime giving too. You can make the gifts during your lifetime; just you have to keep track of them as they count against the eventual estate tax exemption amount. In other words, you can’t double dip. So a woman who set up a trust for her kids with $5 million a few years ago could make new gifts to add to the trust and bring it up to the $5.43 million amount. A husband and wife each get their own exemption. So a couple will be able to give away $10.86 million tax-free in 2015 (assuming they haven’t made prior lifetime gifts).

Totally separate from the lifetime gift exemption amount is the annual gift tax exclusion amount. It’s $14,000 for 2015, the same as 2014, up from $13,000 a year in 2013. You can give away $14,000 to as many individuals as you’d like. A husband and wife can each make $14,000 gifts. So a couple could make $14,000 gifts to each of their four grandchildren, for a total of $112,000. The annual exclusion gifts don’t count towards the lifetime gift exemption.

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LINK

ETA: To the OP, before you do anything talk to your accountant or a tax attorney first to make sure you do the transfer in a manner that has the smallest tax consequence.

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jturn17

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You pretty much got it. You get the house appraised, the gift is at the appraisal value. If the gift exceeds the annual exclusion of 14K (per person, per giver) then the excess goes against your lifetime exemption. You have a combined lifetime-gift / estate exemption.

You are supposed to file a gift tax return if you use up any of your lifetime exemption.

Otherwise, it's pretty simple. You get an attorney to draft up all the documents (it's called a donation in Louisiana, and a gift in most other states). There is a "closing" where the documents are signed. You pay whatever government fees there are to record the transfer since it's real property. You pay the attorney.

Now, if you are doing this to try to look poor for government programs, there are some issues here.

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You could "sell" it to them and close as quickly as the title company can exchange title work. That sale price can be whatever you decide it should be.

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This isn't true.

I stand corrected, not my line of work, hence the caveats not to trust me!