is gifting equity of your rental property to your child deductible at sale ?

[polishprince7]

is gifting equity of your rental property to your child deductible at sale ?

[ATSMAN]

is gifting equity of your rental property to your child deductible at sale ?

Is the property sold at a loss? If you are selling it to a child it is a related party sale so you can't go negative!

[TaxGuyBill]

If the sales documents show a larger price and then a reduction for a "Gift of Equity", the sale price is the actual amount received (the gross sales price minus the "gift of equity").

[Burke]

is gifting equity of your rental property to your child deductible at sale ?

No. Usually this is done to get the bank to approve a larger loan that it would otherwise, based on the sales price shown. The banks should not fall for this.

[Twin Turbo Z]

No. Usually this is done to get the bank to approve a larger loan that it would otherwise, based on the sales price shown. The banks should not fall for this.

Correct. Just went through this with clients of ours. But the bank told to couple it was deductible. Seller was upset, but what was done was done.

[Burke]

Unbelievable. Where do they get this stuff?

[TaxGuyBill]

But the bank told to couple it was deductible.

Well, it sort-of is deductible. The seller only reports the actual amount paid. That means if the documents show an inflated price and a Gift of Equity, the gift is sort-of deductible off that inflated price.