http://www.biggerpockets.com/forums/84/topics/75839-significance-of-principal-residence-question-on-quitclaim-deedMy property was gifted to me by my mother three years ago and I've been renting it out ever since.

One consideration: tax wise, if your partner puts the equity and you put the work, that creates a tax liability in your behalf because for the IRS you receive an equity gift.

We did exactly what @Steven Hamilton II suggested & still do 1099 them as required.But we also made sure we documented the full gifting amount each year, that way when we did get them into properties @ 18 they could justify the 'funds'.

Items would include things like a - $50 Gift Card (Home Depot, lol jk)- House Cleaning service- Coffee Machine- 42" Flat Screen TV- and Ca$h.The only way to get the good items would be to be an outstanding tenant with at least 2-3 year stay.

I do not know what it is even at anymore but they raised it 2 to 3 times in one year recently.The only benefit to FHA now is 3.5% and the whole down payment can be gifted.

Therefore, there is no "gifting" of equity, or trying to screw Uncle Sam.Essentially, as I do not have enough capital for 25% down, and I will not be living in this property - I'm curious as to how this will look to the IRS. 

The money is pretty much a gift from my mom so there are no terms. 

Really, real estate investing is far too intricate to be broken down by a bunch of rules.

Of everything you have posted, the fact that you are ok living a frugal life, is the most powerful gift you have.

The gift tax exemption is MILLIONS.