Tax issues, said Neil V. Carbone, partner at Farrell Fritz, P.C., in New York, including gift tax and income tax. A sale for less than fair market value involves a partial gift. If the amount of the gift exceeds certain thresholds, the gift would have to be reported by the donor on a gift tax return and it could trigger a gift tax.
The gain in the sale, between the discounted price and the seller’s basis, would likely be reported on the seller’s tax return.
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