For 2009, the maximum gift without a reporting requirement is $13K, so if they elect to split the gift, $26K can actually be tax-free. If you parents have not used up their $1 million lifetime gift exclusion, they can claim the exclusion on Form 709 (Gift tax return) and not pay any gift tax at all. If they do not have exclusion available, the top gift tax rate for 2009 is 45%. Either way, you would not be subject to any capital gains or income tax from the gift. Your basis in the home would be the FMV of the gift when given. Please let me know if you have further questions.