The problem is you are changing the terms of the agreement significantly. The tax treatment of the sale in the future is very different for a rental than for a personal residence.
1. Generally, the IRS will assume that co-owners each own a 50% share unless you can prove otherwise.
2. If you sold your personal residence that you lived in as your main home, you can exclude up to $250,000 of the capital gains from income tax. Your ex can also exclude $250,000 of the gain from taxation even though they no longer live in the home, as long as you qualify for the exclusion AND he was living there before the split.
3. However, with a rental property, you must pay the capital gains tax on your half of the gain, whenever you sell.1 You lose the capital gains exclusion, unless you sell within 3 years of moving. Your ex will have to pay capital gains tax on his half of the gain per item #1, unless you can show otherwise.
4. You will essentially have a rental partnership with a silent partner; you want one partner to actively manage the rental unit and collect all rent and keep all the income, while the other owner is a silent investor only. That's a business relationship that is much more complicated than if you owned the home undivided, or if you owned the home together but were still married.
5. Does your mortgage allow you to rent the property? I'll bet it has a clause that you must be an owner-occupier. If you rent without refinancing or getting the lender's approval, you may be in default and they can foreclose at will.
6. You're going to be an absentee landlord? Have you ever done that before? Do you have any idea how much more expensive that is (how much less profit) then if you are local?
This is what I would tell your ex:
Get out now. Refuse to allow the rental unless your ex buys you out and takes your name off the deed and off the mortgage. There are big liability problems with rentals (tenant damage, injury, etc.). What do you (the ex) gain by assuming that level of risk for the indefinite future? How does that risk get paid off? What do you gain for being liable for the property and the mortgage? Suppose your ex-wife loses their job and can't pay the mortgage? Now you are liable for a property and a mortgage, with tenants you probably can't evict. If your ex can't refinance, then sell the house before relocating.
What I will suggest to both of you is that you need legal and tax help before you do this. You might be violating your mortgage. You are certainly creating tax complications. The tax complications could be addressed by forming an LLC or a partnership with written documentation of who is responsible for what, that would allow you to file your tax return in the way you propose. LLCs and partnerships with a person you are not married to are filed very differently from the joint tax return you are used to.
