Q: My dad purchases land with both our names on the deed. I pay for building on the land. What are legal implications?
Land is in Fellsmere, FL.
A: There are several implications to be considered here. First if both your names are on the deed with no other qualifications you are considered equal co owners even though your father paid for the full purchase price. So if it were sold the next day you would both get 50% of the proceeds. Likewise if you solely paid for the improvements on the real property and the property were sold you both would each get 50% of the proceeds. Going hand in hand in this are the tax implications. If your father paid the full purchase price what basis would be used to determine tax liability for each of you on the sale. Should your portion be considered a gift. If no gift tax paid you have no basis so all of your proceeds would be gain. Likewise if you solely paid for the buildings how would your father's basis be determined. If this is a business venture between you and your father you may want to seek the advise of a business attorney particularly as to tax implications when the property is sold, and to memorialize how the property is to be used and how it can be liquidated particularly if only one of you wants to liquidate.
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