I ask because " A gift of encumbered property is valued as the excess of the property's fair market value (FMV) at the time of the gift over any debt to which the property is subject. The liability encumbering the property is deemed consideration paid to the transferor; thus, the donor realizes income to the extent the liability exceeds his or her adjusted basis."

https://www.journalofaccountancy.com/issues/2002/jan/incometaxconsequencesofcertaingifttransactions....