Thanks for your good reply. I am going to file a Form 709 to report the $125,000 difference between the current appraised value of $240,000 and the sale value of $115,000. Less the $16000 annual exclusion makes for a gift of equity of $109,000. I will then apply this $109,000 toward my lifetime exclusion of $12, 060,000. Sound correct?
Thanks again.
