Hello, I am Keith, one of the experts on Just Answer, and pleased to be bale to help you with your question.
Unfortunately, yes! The gain between the current market value at the time of the gift and the net selling price would create a Capital Gains Tax (CGT) liability. The short term owner does have a non cumulative Annual Exempt Amount (AEA) of 11.1K to offset this gain. Anything over will be taxed at 18% or 28% or a combination of the two rates depending on their income including the gain in the tax year of sale.
One small point though, was this property the only residence the new owner owned?
Right, no change to my answer then.
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