We did our best to determine the FMV -- looked at lots of comparable sales, picked the midpoint. There should be no taxable gain. My concern is about how to report the transaction, or whether to report it at all since there is no tax to be paid.
I can report the transaction easily enough using the "transactions you didn't get a 1099-B form for" on the federal return, with the tax basis equal to the sales price. I hope that's the right thing to do (?).
I found out that IL doesn't require you to file a return if there is no tax liability in that state so that's one thing less to worry about. I'll assume the CA return will take care of itself in Turbotax since I have to file in CA anyway.
