My parents own land in Massachusetts (Cape Cod) that does not have a mortgage and want to deed the property to my husband and I to build a house. What are the implications of doing this?

It would be viewd as a gift in that calender year... and as such considered taxible income in that year. Assuming its value exceeds the gift limit fotr the callender year.

Well, not "income". It would be a gift, taxible if in excess of the exclusion amount.