But because I gave the gift with the understanding that they would buy the house in short order like you said, it can’t be considered a gift. The FMV based on the appraisal is accurate, the purchase price of 200k is actually under the appraisal but within the acceptable 25% range they talk about, since in non-arms length transactions, the seller can no longer sell significantly below FMV because of all the issues that caused during the housing crisis.
