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Here a great example. Is they wife give your house to your daughter. The house is worth $300,000. After subtracting the $22,000 exemption, your tax possible $125,100. That's your tax, not your daughter's. If she efforts to give it back to you, she may also have to pay a souvenir tax. Purchase a vehicular. Since most inheritances are not "fortunes" it's not hard to justify taking what mums and dads left and spending on that dream car. Perhaps it's that 1969 Corvette that your 42 year old child still covets from their youth. You know the the one that they'll buy that could use a little work to make it nice again and certainly it won't get that extra work. Or how about your 18 years old grandchild that wants that nifty little two seater that just happens to cost $45,000 and would look terrific on campus in front of the dorm, if they'd like to still manage to go to highschool. 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