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Couple thoughts, but I’m not an accountant. Your parents can gift you it was 15k, now it’s up to 17k per year tax free. If your purchase contract was 300k that’s your cost basis. If it was 180k that’s your cost basis. Sounds like your cost basis was the 180k. It depends what that contract says, it’s recorded with the county so you can look it up. I think you owe tax on the equity gift. I’d try to hit the 2 year primary residence, married couple and avoid the capital gains tax. 250k single, 500k married. We’re all here to learn and tax code is complex. Feel free to correct me, if I missed something.
Actually I don't think any gift Tex exemption comes comes into play here. You're paying 180k for the property. That would be your basis. EA1 hit the nail on the head here.
Your basis is $300k, the sale price. Your parents balance sheet doesn't factor into your balance sheet. If they sold you a $425k condo for $300k, their "gift" was approximately $125k of equity. I would treat it as though you got the condo for fmv and it needed work. The Irs doesn't know.
Yes it went through title company