My parents and my brother own a house, and they are planning to give it to me. Should they sell it to me?

Question

or should they do it as a gift? How much is the tax? How does tax calculated.
I'm in WA. House is worth about 400k to 450k, but there is 230 k of mortgage.

Answer 1

Don't know about WA, but in California a person can be added to a dead for about $25, if this person is a child of the owner. Then the parents and the brother do a "Quit Claim Deed."
The house will be yours without any taxes, BUT they will stay on the mortgage. If you want to take them off the mortgage, you'll have to refinance and get a new mortgage in your name only (AFTER you have a deed in your name only.) Do not confuse a deed and a bank note (mortgage.) You can be a sole owner of the house, but your relatives are still on the mortgage and responsible for it until it's refinanced.
Check with real estate professional if this is the same in your state.

Answer 2

Your parents and brother need to consult a real estate attorney and/or CPA for advice on how to complete this gift transaction. Doing so improperly could expose either or both to a substantial gift tax penalty.

Answer 3

Talk to an estate planning atty...if they give it to you, you are on the hook for paying the tax on the equity.
They might be better off creating a trust, and passing it on to you when they die, but you need to see an atty when you are talking about this much money.