Giving house to adult children?

What is the name of your state? Texas.
After my spouse passed away, I moved out of state (Ariz.) to be closer to my daughter with a child. My single son is still in Tex., living in my house there. What would the consequences (fed,state taxes) be if I Deeded the house over to him 100%. Houses value is around 90k. Thank you for your Help!

[abezon]

He would receive a gift of the difference between the FMV of the house & your basis (which may or may not have been affected by your husband's estate). You report the gift on form 706. The first $11,000 has no consequences; the rest of the gift reduces the total estate & gift tax credit available to you in the future. You pay no taxes now.

understand fmv to be fair market value, but could you explain basis. Sorry not real sharp on these matters! Thanks

[abezon]

Your basis is usually what you paid for the house plus whatever you spent on improvements. However, if the house was owned as joint tenants by you & your husband, your new basis is 1/2 the original basis, plus 1/2 the fair market value of the house at the time of his death. This is called stepped-up basis. If TX is a community property state & you owned the house as joint tenants, your basis is the fmv on the date of your husband's death.