Just to be clear, you cannot claim a loss on this sale.
First of all, a loss cannot be taken on a personal asset, such as your home.
Next, as pointed out earlier, you may be concerned as to what would your son would report as his basis in the house?
If the house is truly worth 115,000, that would be his basis.
If the house is worth more than 115,000, you may be in essence "gifting" him the difference and his basis may be higher than the 115,000 he paid.
This might have no bearing going forward OR it may be of concern if your son sells the house at a gain or uses it as a Rental Property.
More information from the IRS
@gjfudge
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