Just because you don't have cash doesn't mean you don't have an asset that has value. If I give you a house, you don't have cash, but you still have to pay taxe

Just because you don't have cash doesn't mean you don't have an asset that has value. If I give you a house, you don't have cash, but you still have to pay taxes on the gift. I do agree that there is some degree of ridiculosity and there should probably be some tax reform here, but that is the reasoning behind the current rules.