If it was “gifted to you” then you inherit the gifter’s tax basis, not zero but probably still low.

If you make expenditures before you take ownership, this is a gift.  

We agents refer to our licenses as "the gift that keeps on giving" for this exact reason. 

Smaller costs are things like buying new towels/sheets every 4-6 months, and getting small welcome gifts for our guests. 

Use FHA loan:  3.5% down- you can use a gift from a family member for the down payment.  2.

Will this be considered a gift on my part then?

Count your lucky stars,  you just got a gift,(an expensive nice gift too)  that you can start fresh with your own tenant. 

I've talked to banks about purchasing using a gift of equity as the down payment but none I've talked to have been willing to roll the closing costs (which should be minimal) into the loan.

I know that I can pay off a new loan because I am getting $28,000 as a gift every year (Thanks Pop!).  

Question,Someone is willing to gift a property to  my wife and I and the property has unpaid taxes.