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).