What is the best way to report a gift subject to debt? Rental House was purchased for 800k. Debt is 500k. FMV of the House is $1.2M. It's a nonrecourse debt.
Assume for simplicity, gift was done to only 1 heir. I can figure the percentages later.
Is the house reported as a net gift of 700k on the 709 and adjusted basis 800k?
It looks a little weird because the AB is 800k but the gift is for only 700k.