I do want to reiterate that in these transactions what is happening is, the home's purchase price is still $200,000, however the gift of equity becomes a down payment on that amount, however it isn't the same as the buyer giving cash to the seller to use as a down payment, there is still no hands exchanging money involved. This is why when someone get's a 1099-S form they are worried about paying capital gains because it reflects the purchase price, not the price the seller sold for. Does that still make sense?
