Sorry post was bad clients basis is approx 150,000. Yes he has a profit because he has lived in this house for about 20 years. Under this home equity program you can have your house appraised at any time (by the program) and as many times as you want. This appraisal then is your "guaranteed value" using this term lightly but hopefully you get idea. So when he did not get his previous approved apprasial price (market conditions, etc) on the sale he was given an additional $51,000 from the program. Yes he has a profit but what I am hoping I can do is report sales and then take 121 for married couple. Obviously I want to move slow as to not put client in harms way. I have dealt with one of these several years ago and the client back then did not receive a 1099 for shortfall between sale an appraisal. Thought, ideas greatly appreciated.