Capital Gains Split on Sale of Rental

2 Replies

A partner and I are selling a rental SFR. We own it 50/50 and have reported all income, expenses and depreciation on our tax returns 50/50 since we have owned it. We would like to split the sales proceeds 70/30 to give the bulk of capital gains to one partner. Can I do this? Or are we required to each take 50% of the sales proceeds?

FYI - the property was initially purchased by one of us, and then 50% was quitclaimed to the other. Prperty is in CA.

If property was free and clear, then the owner of the property should get the fair market value first from proceeds of the sale.

What was the purpose to do 50/50 and how do you legally wrote that house contribution?

Treat it as a marriage: what property worth before the QCD, belongs to the one who owned it. The gain of the value after that date split 50/50

Thank you Irina,

The QCD was filed immediately after purchase, so all Cap Gains will have occured during the partnership. I put in 70% of the purchase capital and my partner (girlfriend) put in 30%. Property was an all-cash purchase. QCD is for 50% intetest in property as Joint Tenants.

Since day 1, we have each claimed 50% of the income, expenses, and depreciation on our tax returns.

So I guess we are required to each claim 50% of Cap Gains on our tax returns.

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