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Deductions & credits
@TomD8 wrote:
@Anonymous_ --
Jack's parent's home is worth $200,000.
Parents sell the home to Jack for $175,000 - thus giving Jack a $25,000 gift of equity.
Years later, when Jack sells the house, his cost basis is $175,000.
Yes, thank you, that is correct (finally) and we were apparently simply using different terminology. Regardless, the end result is the same.
Also, perhaps we have a different thought process in analyzing this particular scenario. Mine simply follows the applicable regulation (part sale/part gift basis is the greater of price paid or transferor's adjusted basis).
‎August 16, 2021
10:05 AM