You can probably get away with this quite easily as long as you paid at least $25,000 for it.
First problem is the home is not yours. Children have sold homes or thrown out parents. Second, below market sales among relatives brings in the IRS.
"Internal Revenue Service frequently watches transactions among family members and can step in and levy taxes if something doesn't look right."
https://pocketsense.com/sell-house-child-25510.html
I AM a CPA, and neither of your “solutions” would work. The IRS sees undervaluations like you suggest all the time and they destroy them in audits. Losing the step-up in basis is a big deal, as that’s the current key to avoiding most of the estate tax. The best evasive action under a Biden plan would be to not file any documents upon death and hope the IRS doesn’t notice, but that won’t solve your problems if they DO notice. Note I said “evasive” not “avoidance”. Under current law, the biggest mistake I see clients make is transferring parent’s property to their names while the parents are living—they just screwed themselves out of the step-up.
My mother quit-claimed 1/2 of her house to me. She passed away and that made me the sole owner.
Didn’t cost a penny.
Our plan was for the surviving spouse to sell it right after the other one passes. That way the basis is stepped up to market value and capital gains are set to zero.
Does that dodge you suggest really work?
Democrat politicians have sold property to their buddies for $1.. Why can’t any one else?