QUESTION

re the profits to be equally divided or should the person that has been living there and paying for everything get more than the other two owners?

Asked on Apr 29th, 2016 on Estate Planning - California
More details to this question:
Someone has been living in a house that they own with two other people on the title but do not live in the house or in any way pay for anything pertaining to the house (mortgage, property taxes, maintenance etc.) for over twenty years. A
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1 ANSWER

None of the owners have to pay any rent to the other owners since all of them could have lived there. The cost of any improvements [which after all goes to reduce the amount of capital gains] and mortgage payments should first be reimbursed to the one who paid them. Repair costs likely should also but are not as clean cut. Utilities were used solely by the person living there and they should not be reimbursed. If a substantial sum is involved, all of them might want to speak to a local attorney who handles real estate tax issues, because the capital gains of the residing owner [I believe the first $250,000] are protected from state tax but would not be protected as to the non-resident owners so they might want to see if it is not too late to make some type of ownership interest change to reduce taxes.
Answered on May 26th, 2016 at 4:44 AM

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