Will I have to report Capital Gains on the gift of equity

[mjm77]

I'm selling my residence to my son with a gift of equity.  Appraisal Value $950,000.  My cost basis is $615,000.  Selling house for $600,000.  I will contribute $10,000 costs for his new loan.   I owe a mortgage of $360,000.  I will net approximately $230,000.  Will I have capital gains on the $230,000?

Or, is capital gains based on cost basis $615,000 and sales price $600,000, which would be at a loss in this scenario.  Plus I have my exemption of $500K for married if needed it.

Thank you

[M-MTax]

If you're selling to your son for less than FMV....which it appears......then you have a sale in part and a gift in part and that's controlled by section 1.1015-4 

[M-MTax]

As for your gain, you have none since you're getting $600,000 as the selling price and your cost basis is $615,000. So you have a loss but it's not deductible because this is personal use property.

[M-MTax]

BTW, you will have to file a form 709 to report the gift which is the difference between the FMV and the selling price.