Mortgage: $150k
Gift of equity: $120k
Total: $270k
Sold home last week for $300k
Total cash in hand after close: $126k
In short, paid off $150k mortgage, pocketed $126k, for a total net of $276k.
Do I owe capital gains taxes on the $276k - $270k = $6k gains (gift of equity increases cost basis)
Or do I owe taxes not including the gift of equity: $276k - $150k = $126k gains.
Thank you.
