@kaih23
you need to get professional advice. You depreciated the property incorrectly. When you placed the property and service as a rental, your bases for depreciation was your original cost or the fair market value at the time, whichever was lower.
Adding to that problem is your desire in transferring the property and realizing the gain with the least amount of tax. You would not want to put yourself in a position where, for example, the IRS could accuse you and your child of engaging in a sham transaction to avoid tax, and auditing both of you and assessing the full amount of tax that you would have paid if you had just sold the property yourself.
