Do you want to make your children pay more taxes than they absolutely need to?

That’s just what happens when you put your children on the deed. When you put your children on the deed, you’re making a gift, a part of your ownership of the house to them. This often leads to capital gains tax. When they sell it, they will owe the gains tax, but it won’t be calculated on what it was, what it was worth the day of the gift. It will be calculated on what it was worth the day you paid for the house.

How much will that cost them in taxes? Let’s take an example. You bought a house for $100,000. Your children sell it for $300,000. Now they will owe capital gains tax on the difference between the 300 and the $100,000. That is, they will own gains on gains tax on $200,000.

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