Offer your thoughts or opinion on the input financial query or topic using your financial background.

Tax considerations for selling a property below appraised value to family?
Is this legal?  If the purpose of the sale at that price is to defraud somebody else, you could have a legal issue. For example if the purpose was to make yourself appear poorer to make you eligible for government aid; Or to increase your chances of getting a college grant; or to not have to pay money to your spouse as part of a divorce settlement; or if there is an unwritten part of the transaction for the sibling to sell the house back to in a few years when you no longer need to appear poor.  The answer by @littleadv covers the tax complications.  I do have one additional point. The sale can't be a short sale. The bank will never approve. The short sale can only be approved when the bank is convinced that there are no viable purchasers at a level to get all their money back. Your sibling is not an arms length transaction.