# How to Pass Your House to Your Kids Without Costing Them THOUSANDS

## Метаданные

- **Канал:** LYFE Accounting
- **YouTube:** https://www.youtube.com/watch?v=c7QN5Pwp7F8
- **Дата:** 05.05.2026
- **Длительность:** 8:14
- **Просмотры:** 628

## Описание

How to Avoid Big Tax Mistakes When Passing Down Real Estate
Get a Free Consultation: https://mycpacoach.com/contact/

In this video, I break down how homeowners can inadvertently create massive tax bills for their children when transferring property incorrectly, and how to avoid this issue.

I cover key strategies like understanding cost basis, the dangers of carryover basis, and how to use step-up basis to potentially eliminate capital gains taxes entirely. I also explain how estate and gift taxes work, why most people don’t owe federal estate tax, and how to use your exemption strategically.

Plus, I walk through powerful planning strategies like leveraging home equity through the Buy, Borrow, Die approach to access cash tax-efficiently while preserving long-term wealth for your heirs.

As a licensed CPA who tax plans every day, I’m going to simplify these concepts so you can make smarter decisions with your assets. Be sure to save this video, hit the like button, and let’s jump in.

#taxstrategy #estateplanning #realestateinvesting 

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Disclaimer: The information provided in this video is for informational purposes only and is not meant to take the place of professional legal, accounting, or financial advice. If you have any legal questions about this video or the subjects discussed, or any other legal matter, you should consult with an attorney or tax professional in your jurisdiction (i.e. where you live).

## Содержание

### [0:00](https://www.youtube.com/watch?v=c7QN5Pwp7F8) Segment 1 (00:00 - 05:00)

If you own a home and you're planning on leaving it to your children, please be aware that you are sitting on a potential tax bomb that can blow up their inheritance. [snorts] [screaming] So many people screw up their kids inheritance by subjecting them to hundreds of thousands of dollars in additional taxes through estate tax, gift tax, and even capital gains tax. — You guys give up or you're thirsty for more. But what if I told you that there was a way to pass down wealth to your children without them having to pay a single penny in taxes? Well, believe it or not, there are ways to take all the equity that you have built up in your home or even your rental properties and pass it down to your kids tax-free. And today, I'm going to show you how to actually accomplish this as a licensed CPA that tax plans every day at mycpa coach. com. So, let's jump right in. Okay, so let's start with how people actually mess this up and trigger taxes in the first place. Naturally, as people get older, they start thinking about transferring wealth to their children or other relatives. And property is one of those things that always comes up. And what a lot of people will do is that they will jump the gun and start transferring over property to their heirs while they are still living. And there are certainly reasons why someone might actually do this. Maybe they want to avoid probate upon passing, or maybe their children need those assets sooner rather than later. But regardless, when you transfer property to your heirs while you are still alive, you are creating a bigger tax bill for them to have to worry about later. It creates a basis issue, which can be avoided when you fully understand how it works. So, let's break this down. In very simple terms, your basis in your property is simply what you paid for it plus any big improvements you made to the property. For example, let's say you bought a home for $100,000 and 30 years later it is somehow worth $1. 1 million. Well, as long as you don't sell the property, you would never pay tax on that $1 million of equity that you have built up in that home. But let's say you transfer the property to your child while you are still alive. Well, the problem with that is that they will inherit your $100,000 basis, which means if they turned around and sold that property as soon as they got it, they would instantly have to pay tax on a $1 million capital gain. This is called carryover basis. When you transfer property to your kids while you are still alive, they take on your basis, not the fair market value of the home or what the home is worth. But fortunately, there is a way to avoid this entire setup and transfer properties to them where their basis is what the home is worth or the fair market value. So, in the same exact example, imagine them getting the same property worth $1. 1 million and that amount being their basis, resulting in them owing zero capital gains tax when they turn around and sell the property for the same amount. So, how is this possible? Well, in short, we don't want our kids to get our carryover basis. We want them to get something called step up basis which in very simple terms mean that their basis will step up to the fair market value of the property when they inherit it instead of our basis in the property. Step-up basis is basically a cheat code to passing down wealth to your kids. So let's talk about how exactly it works. So, under current law, when you pass away and leave your property to your heirs through your estate, the IRS steps up the cost basis from what you paid to what the house is actually worth on the day you died. It effectively wipes out all of the appreciation that happened during your entire lifetime for tax purposes. So, when we go back to our original example, the $100,000 that we paid for our property is completely irrelevant. Now, when our kids inherit our property under the step up basis rules, even if you owned a rental property and depreciated your basis down to zero, it still would not matter. Your kids would avoid depreciation recapture completely by simply inheriting your property when you pass. Step-up basis only looks at what the property is worth when they inherit it, which in this example is $1. 1 million. So, they would receive a million asset, and the IRS would receive nothing, single-handedly, saving them around $200,000 in taxes in this example. And all of this is 100% legal under section 1014 of the Internal Revenue Code. But what about estate tax? Step-up basis eliminates capital gains tax for our kids, but it does not quite eliminate estate tax. But here's what a

### [5:00](https://www.youtube.com/watch?v=c7QN5Pwp7F8&t=300s) Segment 2 (05:00 - 08:00)

lot of people do not realize. When it comes to estate tax, almost no one pays it, at least federally anyway. Under the 2026 tax rules, the federal estate tax exemption is about $15 million, and that's per individual. So, if you're married, your exemption could be worth nearly $30 million alone. Which means that for the vast majority of people passing down their estate, they wouldn't have to pay a dime in estate taxes if they are passing down estates that are worth less than these exemptions. And here's a little trick that most people don't know as well. You can actually use this exemption to gift your heirs large amounts of money while you are still alive without triggering gift taxes. Now, if you don't know, gift tax kicks in once you gift anyone above a certain threshold. But a lot of people don't know that you can actually use your estate tax exemption to offset your taxable gift up to these same limitations up to 15 million. So, let's tie all of this together with a simple example. Let's say you have a child that needs money and you don't have it and the only thing you can think of is to transfer a piece of property to them. Well, to avoid capital gains issues, we now know that transferring the property to them may not be a good idea long term. It would be much better if they inherit your property when you pass so they can get your step up basis. But if that's the plan, what else can you do? Well, one popular strategy that savvy individuals use is the buy, borrow, die strategy. In short, since we have all this equity in our property, instead of transferring it or selling it and paying higher rates of taxes, we can just borrow against this equity to get cash when we need it with a cash out refinance or with a heliloc, for example. And the reason why people do this is because loan proceeds are not considered to be taxable income. And you can borrow the exact amount that you need without having to worry about taxes. For example, let's say you borrow $200,000 against your equity to help your child with perhaps a down payment on a property that they're looking at. Well, not only would that $200,000 amount avoid capital gains tax, but you could also avoid the gift tax as well by using some of your $15 million estate tax exemption as a credit on the amount above the gift tax exclusion. And that's just an example, but you can accomplish so much with this setup. your child could get the support that they need. You could avoid gift tax by using your estate tax exemption as a credit. You also avoid capital gains tax by allowing them to inherit your property when you pass instead of transferring it over to them early. And you could likely avoid estate tax completely when you pass if you have used less than your total estate tax exemption. Let me know what you think about this in the comments below. And please hit the like button if you found any of this to be helpful. And if you need immediate assistance with reducing your taxes, just apply to work with my team today at mycpa coach. com.

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*Источник: https://ekstraktznaniy.ru/video/50682*