CPA of Denver · Work directly with Philip M. Falco, CPA
Family assistance can be built into a home transaction in different ways. Identify whether the proposed benefit is a discount on the property, favorable financing or forgiveness after closing. Those choices should be evaluated and documented separately.
A Discounted Price Is a Valuation Question
Compare the proposed consideration with supportable fair market value. Keep an independent appraisal or other appropriate valuation evidence. Calling a transfer a sale does not by itself resolve whether part of the value transferred is a gift.
A Reduced Interest Rate Is a Financing Question
Below-market financing may raise deemed-transfer and interest issues. Evaluate the applicable provisions and note terms; do not assume that a rate acceptable for one purpose resolves every gift and income-tax question.
Forgiveness Is a Later Event
Reducing or cancelling a genuine debt can raise additional tax questions. Keep a record of the original obligation and discuss the proposed change before signing a release. An informal expectation of annual forgiveness should be disclosed during the initial review.
Reporting Is Different From Paying Tax
A federal gift-tax return may be required even if no gift tax is currently due. The applicable-year rules, valuation, prior transfers and the donor’s circumstances determine the filing analysis. Do not use an annual exclusion amount as a substitute for evaluating a long-term financing arrangement.
Coordinate the Advice
Confirm whether the engagement serves the buyer, seller or another family member. Provide ownership details, valuation evidence, proposed agreements and any side arrangements. If multiple parties seek advice, the firm must assess whether a joint engagement is appropriate.
Use the Before You Sign checklist (PDF) and the family seller-financing service page. A gift valuation, Form 709, written memorandum or return preparation is not included in the $350 consultation.
Related Family Real Estate Guides
Frequently Asked Questions
Does no gift tax due mean no gift-tax return is needed?
No. Filing obligations and the amount of tax payable are separate questions.
Can we assume planned annual debt forgiveness is harmless?
No. Disclose the complete arrangement and obtain advice before committing to forgiveness or other changes.
Discuss the Transaction Before You Sign
Review the $350 CPA Consultation for a focused discussion, with up to one hour total for document review, preparation and the telephone call. Written recommendations, detailed calculations, return preparation and implementation require a separately agreed scope and fee. Send a service-fit inquiry if you need a quote for a written analysis; identify the parties seeking advice, intended closing date and requested deliverables. Do not send sensitive records by ordinary email.
Official References
- IRS Publication 537: Installment Sales
- IRS Applicable Federal Rates
- IRS Publication 523: Selling Your Home
- IRS gift-tax overview
Updated October 17, 2026 · General information. Tax treatment depends on the transaction, applicable year and accepted engagement.