@AmeliesUncle we don't actually know the sales price was $412k. All we know is that was the financed amount. Some of that could have gone to closing costs. Or could be equity out (that "almost all" equity was gifted implies that some wasn't).
So @MickieDBaca how much cash did you received from the sale? Do not include any seller/buyer adjustments for real estate or utilities or other expenses of the sale.
@DianeW777 I do not think the sales price was $515k. The seller/donor did not sell for 515k. The transaction is a partial sale and partial gift. It is two things.
- A sale with proceeds of $412k (if that is the correct amount) and some basis in the hands of the seller/donor.
- A gift of the FMV - the proceeds (probably close to $515k-$412k). Gifts are not relevant for 1040 income except to establish basis in the hands of the donee for a subsequent sale.
If there is a 1099-S that shows 515k of gross proceeds then you do need to find a way to backout the gift part. While entering the gift as a sales expense would make the numbers right, that doesn't feel right. I'd look more carefully at the 8949 adjustments to see if something else made more sense. (https://www.irs.gov/pub/irs-pdf/i8949.pdf page 8-10)
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