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1031exchange or buy out ex-husband
I have a property I own with my ex-husband. It's in Houston, TX. I consider it an "A" property. Good Area, good school district. Tenant always pays on time and has a great job. The lease is coming up for renewal and my ex wants to 1031 the property or sell it. I don't want to sell it and I am not ready to do a 1031. Here are my questions:
Can we both 1031 into separate properties?
If I buy him out, how do I calculate the price? This property is worth ~250k, and we owe about ~$45k.
Thanks in advance!
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Jen Pothilat I’d do a cash out refinance. First get an appraisal so you know what the actual value is. If it is $250k then subtract the $45k leaving $205k divided by 2=$102,500 equity each.
Cash out refi at 70% loan to value.
That’s $250k at 70%= $175k New Mortgage!
Split the closing costs or make him pay the closing cost since you are taking on the debt.
$175k -$45k old debt= $130k.
$130k- $102,500 = $27,500 cash out in your bank account.
You pay no taxes on any of this as you don’t pay taxes in a loan.
He pays taxes on the $102k as it’s considered income from you buying him out.
Plus he pays you for the closing costs.