It is generally not a good idea to gift real estate that has appreciated in value because the tax basis of a gifted property is carried over, as opposed to the tax basis being stepped up for inherited property.
The cruelest part, however, is that the potential gift tax liability for the gifted real estate will be the fair market value IRS Code Section 2512 (a). So the person gifting the property has gift tax liability based on the fair market value, while at the same time the recipient receives potential income tax liability related not to the fair market value but instead to the basis.
§ 2512. Valuation of gifts
(a) If the gift is made in property, the value thereof at the date of the gift shall be considered the amount of the gift.