Thank you @VolvoGirl I don't think I made any capital gains. I purchased the property for 86k and sold it for 85k. Would I still have to pay
They are two separate transactions each covered by their own rules and handled separately.
You selling property you own is reported on your tax return.
You gifting money to anyone is not taxable or reported, and it doesn't matter where the money comes from.
As far as the property is concerned, you have a taxable gain if you sell the property for more than your adjusted bases. You must reduce your basis by any depreciation you took or could have taken while using the property in business. Your capital gain has nothing to do with the actual amount of cash proceeds you receive.
You say income property. Let's assume this was a rental house. When you purchased for $86K, you needed to assign a value to the land (does not depreciate) and to the improvements (buildings, etc.) which depreciate over 27-1/2 years. You can add the cost of improvements, which also depreciate starting from the date they are installed. This can get complicated and you or your accountant should have been preparing depreciation schedules and keeping records.
Take the simplest case, you owned the property for 30 years and made no improvements. It is now fully depreciated, and your cost basis is only the original cost of the land, let's guess $5,000. If you sell for $85,000, you have an $80,000 capital gain. Since this gain is due to depreciation, you pay depreciation recapture tax, which means the gain is taxed at ordinary income tax rates (15%, 22%, 24%, etc. but capped at 25%.) You don't get the benefit of the 15% long term capital gains rate since all of your gain is due to depreciation recapture.
Take a more complicated case, suppose you owned the property for 15 years and made $20,000 of improvements that are partially depreciated. Your adjusted cost basis might be somewhere around $50,000. So you would have $35,000 of capital gains, again all taxed as recapture in your case.
This is reported on schedule D. Any other kind of income property (store front, farm, oil producing land, forest land, etc.) will have an original cost basis, depreciation, and other adjustments to basis, although they differ in details. There should be depreciation calculations on your past tax returns that will tell you what your current cost basis is.