Mom and dad have a second home (camp) they use sparingly that their son wants to buy. They want to "gift" part of the FMV to their son so they propose:

Cost $150,000
FMV $260,000
SP $208,000

They want to sell it for $208,000 which will gift their son 20% equity going into the transaction. Clearly there would be a gift of $52,000 and they would file a gift tax return accordingly.

Is the taxable gain on the sale $58,000 ($208k-$150k)? I assume so but am concerned the closing statement get drafted at $260k with a gift of $52k in the buyer and seller section and the lawyer sends out a 1099-S for $260,000.

Any thoughts or experience with this?