What would be the costs associated with gifting a fully paid off house to your children? I know that you would have to file a gift tax for anything over $14k in a year, and if they were to sell the home they would pay capital gains tax, but what other things would need to be addressed? Title fees? Just wondering what would be the process?
The annual exclusion for gift tax is $14k, but this can be doubled if you also use your spouse's annual exclusion. That means you could give up to 28k per year, per person. If you have five children, you could gift up to $140,000 per year (14k*2 adults*5 children). That's a lot of cash.
You could talk to a CPA or tax attorney about the possibility of putting the home into a trust or partnership, and then gifting partnership interests to your children each year. Within a few years, you could effectively transfer the entire home, without ever going above your annual gift tax exclusion amount in any given year.