Q: Can I sell home to a business partner for the remaining mortage balance (it is an assumable loan) for 65% of business?
We share a business currently 20-80 cut. 20% me, and I’d like to sell them my home for a 65% cut of the business to make it 65%/35% new terms
A: Yes provided the mortgagee agrees to the assumption of the mortgage. Try to get a release from the Mortgagee for future obligations under the mortgage. You will have to transfer the home by a deed recorded with the County Clerk and pay documentary stamp taxes on the balance of the mortgage assumed. Assuming you and your partner have limited liability company, you will have to amend the operating agreement of your LLC to show you own 65% of the Membership Interest of the LLC with an increase in your capital account and your partner has a 35% of the Membership Interest in the LLC. Talk to the accountant for the LLC as to what happens to his Capital Account. Talk to your account ant as to what federal income taxes you may have to pay as a result of the transfer.
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