When someone gifts property to a family member, they are still required to declare it as a sale and use fair market value as the price it was ‘sold’ for. Does the same thing apply with a business when no money changes hands?
The general rule is “yes” but there could be some “depends” in the answer, such as whether the family member is the person’s spouse and whether it is a farming business. If the business is incorporated, there may also be ways of deferring tax on the gift of shares.
It’s run as a sole proprietorship. The gift is to a daughter and son-in-law.