Capital Gains And Cost Base

Situation is my son is purchasing a condo for $173k
I gave up my commission ( realtor) to lower the price to $167k

As far as later when figuring capital gain on this investment property, is the base $173k or $167k
The developer chose to state the purchase price at $167k

Do we need to re-stucture the contract to make the purchase price $173K, so his base price will be higher or can he add my commission credit on later when determining the base price.

Also I do not want to claim this as income on a 1099

If your son had paid all cash for the property, how much would he be out of pocket? That amount is his cost basis. Restating the contract won't help because the builder's net proceeds will be reduced by the sales commission you waived. The net result will still be the same cost basis for your son.

Thanks, NewKid , for the reply

So without my commission deduction he would have paid $173K , but as I understand you to mean that basis is only $167K (speaking of price only)
?

The cost basis is 167K because that is all he paid. If he had paid 173K, then his basis would have been 173K.

thanks again, I guess that's all clear and good to know there is nothing we could have done differently as far as wording of contract.