<prompt> Human: If you own land or a business that you will leave to a family members, rather than waiting for your death, can you simply sell it to your family member for 1 instead of leaving it in a will, and therefore avoid estate tax?  <response>: This is probably a bad idea. Estate tax doesnt kick in at federal level until family member has given away over 5.x million. The reason gifting something this way is a bad idea has to do with taxes later on if the recipient sells. The gain is calculated in relation to the cost basis of the gifter. If its inherited, the recipients cost basis is value at date of death.Quick illustration: Family member buys property for 50000. Twenty years later it is worth 300000. Scenario A: Family member dies. You inherit it with cost basis 300000 and sell it for 325000 a year and a half later. Your gain is 25000. You pay capital gains tax on 25000 of 15, which is 3750.Scenario B: Family member gifts it to you for 1. Your cost basis is 50000. You sell it a year and a half later for 325000. You pay capital gains tax on 275000, which is 41250. 