Should i sell it to him for fmv or $1
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@MZ2R , unable to answer because "should" is dependent on many other things.
From tax perspective -- you may want to consider two different pricing point --
(a) Book value --- selling at this price would guarantee NO gain or loss for you. However, for the buyer ( if not at arms length ), it may be tantamount to gift of the difference between FMV and book value ( if a positive / gain situation)
(b) FMV -- may constitute a gain for the seller and no restrictions on the buyer.
(c) any price less than FMV will always mean a gift to the extent FMV is above the Book Value.
Does this general answewr satisfy your query ?
should is your choice. but the following rules apply.. if your tax basis is greater you get no tax deduction for the loss. if FMV is greater and over $16,000 you have to file a gift tax return.
as to his situation
the tax basis of the shall be the same as it would be in the hands of the donor (you) except that if such basis is greater than the fair market value of the property at the time of the gift, then for the purpose of determining loss the basis shall be such fair market value.
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