Best way to take over parent's house?

[Manuel Diaz]

My mom has a house that is fully paid off. She wants to pass it on to me. What would be the best or easiest way to do that? (While still alive)

[Linda Weygant]

Your question is sort of a trick question.  The best way (from a tax standpoint) is not the easiest.  

I mean, she could just quit claim it to you.  That's the easiest, but the gift taxes would be a killer.

Ideally, from a tax standpoint, she should just leave you the house in her will, but you seem to want to do this while she is still alive.

You could set up a complicated long term transfer where she transfers a portion of the property to you in the amount of the maximum non-taxable gift transfer amount.

You could buy the house from her at market rate.

She could just give you an assignable lease so that you pay her rent but are able to collect it from others.

From what I can see, you can get easy or you can get "best" but you can't have both.