does a gift of equity have tax implications 
yes for the giver it can have tax implications the amount of equity gifted can count against the annual gift tax exclusion or the giver s lifetime gift tax exemption a gift of equity is not directly taxable for the recipient but could incur higher capital gains taxes later on 8 this is because the gift of equity reduces the buyer s cost basis increasing the likelihood that they will earn a profit the future sale price minus the cost basis if they sell the property all parties in a gift of equity should consult with a tax professional to understand any potential tax liabilities the bottom linea gift of equity is a way for a seller to help buyers usually family members purchase a home the seller doesn t give the buyers money as they would when giving cash for a down payment instead they agree to sell their home below market value this gives the buyer immediate access to more equity than they paid for 