You can finish the machining on a lower receiver, but according to federal rules (USC Section 922) you have to mark it with a serial number. As someone else said, you're not supposed to transfer it, but in theory you could "give" it to a family member or friend in a private transfer, because a) you're not making money on it, and b) it's not an FFL transfer. But I ain't a lawyer.
I have a 0% lower from DS Arms that I intend to machine this year. I am going to put my last name on it, with serial number 1. I plan to keep the gun until I die or become incapacitated, then give it to my son. That's what I'm doing. You should make sure of the law before you take my advice.