@curiousminds wrote:
When you say “the gift of equity reduced his cost basis” are your referring to the buyer? So it should say “the gift of equity reduced the buyer’s cost basis”? Otherwise that would just increase the amount of capital gains for the seller.
If you read the following sentence in an earlier (much earlier) post, I suspect that is what might be causing a great deal of confusion.
If dad's basis before the gift is 100 and he makes a gift of equity of 15 to his son, isnt his basis 85 for purposes of computing the gain?
Clearly, the seller's (in the above instance, the dad's) basis is not reduced by the amount of the gift of equity when the seller makes a gift of equity.
