Sale of Rental home to daugher

[Dory]

Taxpayer sold rental home to daughter. bank lists selling price at $83800, however taxpayer gave equity gift of $16,800. Does this reduce selling price for 4797? Sorry that I didn't make the question clearer. The
settlement statement lists the sale price at $83800 but then shows equity from Seller of $16800, total reduction amount due seller was $68607.37 after closing costs, mortgage payoff and this equity from seller. There is a gain not a loss..

[Roland Slugg]

Post unclear

Hello Dory ... welcome to this board.

The lack of a fast reply might indicate that readers found your post unclear, as did I. You may wish to edit the post for clarity.

If the actual selling price was $83,800, that is what should be used on F-4797. If by "equity gift" you mean that the father believes the property was actually worth about $100,000, this is not relevant for income tax purposes, but there may be gift tax consequences. If there is a loss when the sale is calculated on F-4797, the loss is not deductible by the father.

Btw, most real estate sales are reported by title or escrow companies, not banks. Was this a special situation of some kind?

[JG EA]

Hi. I also had a post about gift equity. My question was if the sale was recorded as the higher number and the seller gifted money (on the closing statement) does my client the buyer have the higher amount as her basis? Is this somewhat your question except you are asking it on the seller's side?

You might be in a better position, because you will have access to the 1099S. I didn't see any information on the actual sale price except what was on the closing statement.