@chockstra --
OK, your adjusted cost basis is $113,700. Your proceeds from the sale were $56,000. You have a capital loss of $57,700.
Were your cousin and his wife paying you full market value rent for the property over the years? If not, then your capital loss is not deductible on your tax return.
You still have the obligation of filing a gift tax return with the IRS. The obligation to file the gift tax return lies with the gift giver, not the gift recipient.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
