CA, My mothers living trust was to leave her $600,000 house to her 6 children. But the deed to the house had been changed to my sister's and brother-in-law's name before she died for a refinance. They explained that they needed to refinance to pay off Mom's credit card debts. Now my sister has proposed to pay the rest of us the fair market value of the house so she can keep it by giving us a "gift" of $100,000 each. Would I as the receiver need to pay income tax, or gift tax on that amount? Or should the money be put back into the trust and then distributed to the Beneficiaries? Your help would be greatly appreciated.