Not if you sell/gift it for $0.
Why are you concerned about that? When your relative eventually sells it, they will be receiving about $400,000. So having them pay the $12,000-ish in taxes shouldn't be a big deal. If you really want to, you can give them some cash for $12,000-ish when it is sold.
Let's take a step back a second: Is there a mortgage on this home? If so, that will significantly complicate this transaction. If there is a mortgage, what will be done with it once the relative receives the home?
As Tom said, there can be a lot of things to consider for a transaction like this, so a tax professional would be a good idea BEFORE you do any transferring of ownership. For example, what is the purpose of this Gift?
