Yes I meant a capital loss (not gain) and you confirmed that it is a non deductible loss because it is to a related party. How will this be accounted for in Proconnect? Record the actual assumable mortgage amount as the proceeds? I was not sure how to record on the disposal. 

The daughter has been paying above 90% of a FMV rent which the IRS allows. The rental loss was marginal in prior years and less than the annual depreciation expense subject to limitations on Form 8582. 

With regards to the Form 709 gift tax do we need an appraisal to determine FMV to calculate the amount of reportable gift income?