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[quote=Anonymous][quote=Anonymous]That’s not a smart way to do it, anyway. Giving a million dollar asset to your sibling now has significant tax implications. It will need to be documented with the IRS as a gift and count against your parent’s lifetime estate tax exemption. Your sibling will also get your parent’s basis, as opposed to a stepped up basis if they inherited it. The estate tax exemption might not matter under the current exemption, but the current level sunsets in the next few years and there is  no guarantee what the level will be in the future. It could be significantly less.

The best thing you could do here is suggest to your parents that they get some good tax advice STAT. There are probably creative solutions involving trusts that could be structured to let your sibling have use of the house while making it fair for the other heirs, in a way that would also maximize the tax benefits of the inheritance laws. [/quote]
Excellent points. In your shoes, OP, I would schedule a time to talk to your parents and make the following points as dispassionately as you can:

1. Recognizing that we’re talking about your assets and you have an absolute right to do with them what you want, have you thought through what this transfer would do to family dynamics?  Any way you look at it, you would be giving one and only one sibling a massive windfall and quality of life upgrade. I can’t tell you that I’ll be able to carry on the way we always have in the face of that kind of favoritism.  I would definitely try because I love you and know your intentions are good, but what you are proposing is hurtful to the rest of us.

2. If you decide to move ahead with this, I’d recommend you contact an estate or tax expert, because my understanding is that a gift, rather than an inheritance, could lead to significant unwanted tax liability [for reasons mentioned by smart PP above]. [/quote]

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