How do I fill out gift tax form 709, Schedule A? I gave son a gift of equity of $158,550 so he could buy my house at 317K. Appraised value $320K. My purchase price 73,150

[Anonymous_]

The short answer is it would be the fair market value of the gift, which is the FMV of the house less any and all encumbrances (e.g., mortgage(s)).

[lilmonky4]

So what number would I put as the donors adjusted basis of gift, and what number would I put for the value of the gift (on Schedule A)?

[Anonymous_]

Your cost basis plus any improvements less any casualty losses deducted (in the past).

[Anonymous_]

The value of the gift would be the fair market value of the property less any encumbrances.

[lilmonky4]

So the donors adjusted basis would be $73,150 and the value would be $320k? Where do I put or account for the $158,550 that I gifted to him of the total sale price?

[Anonymous_]

That would be the amount of the gift. Did he pay anything for the property? I aasume he did so.

[lilmonky4]

He paid 158,550 for the property (158,550 that he paid + 158,550 that I gifted him = $317,100 sale price of house)

[Anonymous_]

You stated the property had a fair market value of $320,000.

So, subtract $158,550 (the price he actually paid) to get the amount of the gift.

[lilmonky4]

Ok I think I understand now. Just to confirm - the donor’s adjusted basis of gift = $73,150 (the price I originally bought it for). The value at date of the gift = $161,450 (320K - 158,550). Right?

[Anonymous_]

Yes

[lilmonky4]

Wonderful! Thank you so so very much, you are a lifesaver!