Sale of Rental

[Duane Anderson]

Taxpayer sold their rental for 280,000 to their grandkids....As part of the sale they gave a credit for 56,000 as a "gift of equity"....Can this be used to reduce the selling price or show as an expense of sale....I cannot find this issue in the taxbook....Thanks,,Duane Anderson

[TaxGuyBill]

Yes, for tax purposes the sales price is the amount received (which includes payoff or mortgage and other debts), not the made-up number that they use on the form to manipulate mortgage rules for PMI.