Buying Property from a family member

[Daniel Morrison]

For the last 14 years I've been renting from my father, November of this year that will change. I will be purchasing the property from him for $40,000 under market value, marking my first purchase into my real estate investing career. He currently owes a fair sum of money and cant pay it off in full. His investment accounts wont let him adjust his IRA to a personally directed IRA, so buying the property from him as an owner finance is out of the question. Any suggestions on going about this without getting involved with "gifting taxes"? I plan to go the typical route , get a bank loan, bank appraisal, right along with contractor quotes to help bring down the appraisal price, but that still will place the property as being sold for $40,000 under market value by the IRS's view. I'm allowed $15,000/year as a gift but knocking $25,000 off the property will be very difficult. Any suggestions would be very helpful, Thanks in advance.