Overpay for Grandma's house to save on Taxes??

[Ray M.]

Is it possible to overpay for Grandma's house and have her gift the difference back to me?

For example: Say the house is worth 100k, I pay 150k cash for the house with a plan to fix it up and flip it in a few years. Grandma gifts me back the 50k (diff. of what it was worth and what I paid).

Let's say, 3yrs later I spend 20k to fix up the house and sell it for 140k. Would I be able to claim a 10k loss on my taxes because the original purchase price was 150k?

Could this be considered illegal or fraud in any way??