Taxes On Selling Rental Property
I sold a residential rental property to my son. I owned it for 14 months. In the sale I gifted a substantial amount to my son in the form of equity. Does the gifted amount still count as profit in the sale or does it come off of the selling price? :-)
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The sales price for calculating gain would be whatever he paid you. Sales price - your purchase price - improvements you made + any depreciation taken = gain. If you realized a loss on the sale, you cannot deduct the loss until your son sells the property to an unrelated party.
There may be either gift tax issues and/or estate tax issues since you gifted him a large part of your equity.
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