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Level 2
posted Jan 26, 2022 7:25:27 AM

Rental Property Sold - Partnership Percentages

We sold our rental condo last year in ON which was owned by myself - 50%, my wife - 49% and my son  - 1%.  (Son's name was added to the the Title for the 5% down mortgage requirement as he lived in the condo and paid rent)  We owned the condo for 7 years with income rec'd and expenses paid always split using the same percentages within our turbotax returns.  However, my son increased his percentage in the condo last year. 

 

My question is: Can the percentages be changed within turbo tax, decreasing mine and my wife's percentages (approximately 33% each) which will minimize the capital gains needed to be paid?  

 

 

 

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5 Replies
Level 15
Jan 26, 2022 7:41:00 AM

Are you using TurboTax Business to prepare a 1065 for the partnership?

 

Regardless, you cannot randomly change the percentages solely for purposes of reducing tax liability.

Level 2
Jan 26, 2022 7:45:08 AM

No, I am not using that program.  I am using TurboTax Premier. 

 

It's not "randomly" as my son had increased his percentage of ownership in the property.

Level 15
Jan 26, 2022 7:53:44 AM

Do you have an actual partnership or have you merely been splitting the income and expenses on your returns?

Level 2
Jan 26, 2022 7:57:23 AM

We have just been splitting the income and expenses.  

Level 15
Jan 26, 2022 8:19:42 AM

In that case, you might as well continue to split the income and expenses according to your percentages of ownership. If it is otherwise, then both should be reported according to who receives the income and pays the expenses.