From the video
Gift the house or leave it: run your own numbers
You came from the video Gift the House or Leave It: Which Costs Kids $41,865? This is the Gift or Leave It worksheet from it. There is a line for your price, a line for your improvements, and a row for each child, so you and your CPA can see what a gift now would cost your kids in federal tax when they sell, against what leaving it to them would cost. Free.
Get the free Retirement Money Blueprint, plus the Gift or Leave It worksheet
Two columns, give it now and leave it, five lines each: starting number, gain, federal tax, paperwork, and who signs. Under that, one row per child with their own filing status and income, and a list for your improvement receipts. The video's house is on the sheet too. The Retirement Money Blueprint and its workbook come with it.
Gift or Leave It worksheet (Excel)
The same worksheet as a PDF, to print
Your house, your kids
The boxes start with the video's house. Change any of them and everything below updates. Each child's row assumes the children split the house evenly and sell at today's value.
Each child's row
Taxable income is their income after deductions, before the sale.
| Give it now | Leave it | |
|---|---|---|
| 1. Your kids' starting number (basis) | Value on the day you die | |
| 2. Gain if they sell at today's value | $0 | |
| 3a. Federal tax at a flat 15% (the band most heirs land in) | $0 | |
| 3b. Federal tax on your kids' own rows (with the 3.8% tax) | $0 | |
| 4. Paperwork | None for this | |
| 5. Who signs to sell or refinance | Your kids | You, for as long as you're here |
| Child | Share of gain | At 0% | At 15% | At 20% | 3.8% tax | Federal total |
|---|
| Add one child to the deed for half (their half carries your starting number, at 15%) | |
| What your improvements already cut from a gift's bill, at 15% |
The video's house
Bought for $150,000, worth $429,100 today, the kids sell at that price. Gift it now and the gain is $279,100. Leave it to them and the starting number resets to the value on the day of death, so a sale at that price has no gain at all.
| Who receives it | Gift it now | Leave it |
|---|---|---|
| The gain taxed at a flat 15% | $41,865 | $0 |
| One married child, $80,000 taxable income | $44,399 | $0 |
| One single child, $80,000 taxable income | $48,523 | $0 |
| Two married children, $80,000 each, together | $36,328 | $0 |
| Two single children, $80,000 each, together | $44,574 | $0 |
| With $50,000 of improvements, at 15% | $34,365 | $0 |
| Half the house added to one child's name, at 15% | $20,933 | — |
How the rows are worked
A gift passes your starting number along: what you paid, plus improvements (IRC §1015). An inheritance resets it to the value on the day of death (IRC §1014). Every child's gain sits on top of their other taxable income. For 2026, married filing jointly, gains are taxed at 0% up to $98,900 of taxable income, 15% up to $613,700 and 20% above that. Single: 0% to $49,450, 15% to $545,500.
The extra 3.8% is the net investment income tax. It applies once modified adjusted gross income passes $250,000 married or $200,000 single, and a gain this size in one year usually crosses that line on its own. The worksheet estimates that income as taxable income plus the standard deduction ($32,200 married, $16,100 single) plus the gain.
The reset only covers growth up to the day of death. Growth after that is taxed when your kids sell, and if the value falls before death, their starting number falls with it. Leaving it does not take a trust: a will, a revocable living trust, or in some states a transfer-on-death deed all pass the house at death.
Form 709 and the gift tax
In 2026 you can give up to $19,000 to any one person without reporting it. A house is far more than that, so a gift needs a gift tax return, Form 709, due by April 15 of the next year. If you and your spouse own the house together, you each file for your own half. Tax is only owed once your lifetime gifts pass $15,000,000 per person, so filing the form is not the same as owing on it.
When a gift can cost little
A child who owns the house and lives in it as their main home for two of the five years before selling can exclude up to $250,000 of gain, or $500,000 on a joint return when both spouses live there. Your years in the house do not count toward theirs. A gift built into a bigger plan by your lawyer is the other case.
If paying for long-term care someday is part of the picture, Medicaid looks back five years at gifts, including a house. That belongs with an elder law attorney before any deed is signed. The next worksheet, House to Care Months, covers care costs.
Your Gift or Leave It worksheet
Filled in from the calculator above. Print it and take it to your CPA and your lawyer.
| Purchase price | |
| Improvements with receipts | |
| Starting number (price + improvements) | |
| Today's value | |
| Gain if gifted and sold at today's value | |
| Federal tax at a flat 15% | |
| Federal tax on the children's rows below | |
| If left to them and sold at the date-of-death value | $0 |
| Form 709 taxable gift |
| Child | Filing status | Taxable income | Share of gain | Federal tax if gifted |
|---|
Improvements I can prove (item, year, cost):
Four questions for your CPA and your lawyer
- What is my starting number, and which improvements can I prove?
- Which route passes the house at death in my state?
- If a child will live here two years or more, does the home-sale exclusion cover them?
- If care is part of the plan, how does a gift change it?
Federal tax only, 2026 rules. Your state may add its own tax. Selling costs lower the gain; your CPA will subtract them. Education, not financial advice. Run your own numbers with your CPA before anyone signs a deed.
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