Tax Implications of Transferring Property in Ohio: What You Need to Know

Transferring real property — whether to a child, a spouse, an LLC, or a trust — is rarely just a paperwork exercise. Done without understanding the tax consequences, a deed transfer can trigger an IRS gift tax filing obligation, eliminate a valuable stepped-up basis for your heirs, or cause an Ohio property tax reassessment. This guide walks through the key tax issues Ohio property owners face when transferring real estate.

Federal gift tax: when does a property transfer trigger it?

Gifting real property may have Federal gift tax implications. Any gift over the current year's annual gift tax exclusion amount (currently $19,000/year per recipient as of 2026) will trigger a requirement to file a Gift Tax Return (Form 709) with your annual tax filing. Gifting over the current year gift tax exclusion amount does not mean that you will owe any tax on that gift. Effectively, when someone makes a gift over the annual exclusion amount, that amount reduces your lifetime exemption (currently $15,000,000 for an individual as of 2026) for the same amount. Questions about Federal gift tax obligations are best addressed by a CPA or tax attorney familiar with your overall financial picture.

The stepped-up basis: why gifting during life may cost your heirs more

Consider a straightforward example: you purchased your home for $50,000, and it's now worth $300,000. If you gift it to your child today, they "step into your shoes" and acquire the real property with your $50,000 cost basis. If they were to then sell the property, they owe capital gains tax on up to $250,000 of gain. If instead you leave the property to them at death, their basis steps up to the fair market value on the date you die — likely $300,000 or more. A sale at that point triggers little or no capital gains tax on the appreciation that occurred during your lifetime. The difference in tax exposure can be substantial, and it's one reason many estate planning attorneys recommend using a TODDA or other planning tool over an outright gift for property that has appreciated significantly.

Ohio conveyance fee

All 88 Ohio counties charge a conveyance fee for non-exempt transfers of real property (typically $1 per $1,000 of value as a state minimum plus an additional permissive county fee of up to $3 per $1,000, for a potential maximum fee of $4 per $1,000 of valuation). Many counties also charge an additional $.50 per parcel fee for real property transfers. Real property transfers that qualify as exempt transfers under one of the reasons listed in Ohio Revised Code Section 319.54(G)(3) are not charged a conveyance fee.

Property tax implications: CAUV, homestead exemption, and reassessment risk

Transferring real property can affect CAUV (Current Agricultural Use Valuation) status, cause loss of a homestead exemption on a primary residence, or trigger a county reassessment. These are county-level issues. Prospective buyers of real property that has current CAUV status or homestead exemption should understand the implications of acquiring the impacted property and whether they can continue the special tax treatment once the property transfers.

Transferring property into an LLC: what changes

Transferring real property into an LLC is a commonly used practice to limit liability, but it can have unintended consequences if not planned out and executed properly. Conveyance fees, possible loss of homestead exemption, mortgage due-on-sale clause risk, and title insurance implications are all real risks that could impact you and your bottom line if a transfer to an LLC is not done with care.

TODDA vs. outright gift: the tax case for waiting

A TODDA gives a step-up in cost basis to the beneficiaries upon the death of the property owner and it lets the owner retain control during life (so no immediate gift tax implications and no basis transfer) while ensuring non-probate transfer at death.

This is not tax advice — here's who you should talk to

An Ohio real estate/estate planning attorney can address the deed and legal structure; a CPA or tax attorney should be consulted for the tax filing obligations.

Ready to transfer property the right way?

McEndree Law LLC helps Ohio property owners structure deed transfers correctly. Contact us to discuss your situation.