How to reduce taxes on a home sale as an unofficial partial owner?

[Sunny Yu]

So if I contributed some money to my dad when he bought an investment property - I made the PSA deposit during the transaction. Verbal agreement is I’m part owner of the property, but we’re flexible on semantics as long as profits are divided up proportionately.

His Trust is the sole owner on title with me as the beneficiary. Now he wants to sell the property. How do I get my money back with minimal tax liability?

Current ideas are to view it as a partnership, or an interest-bearing loan from me to him.

[Nick Maugeri]

Quote from @Sunny Yu:

So if I contributed some money to my dad when he bought an investment property - I made the PSA deposit during the transaction. Verbal agreement is I’m part owner of the property, but we’re flexible on semantics as long as profits are divided up proportionately.

His Trust is the sole owner on title with me as the beneficiary. Now he wants to sell the property. How do I get my money back with minimal tax liability?

Current ideas are to view it as a partnership, or an interest-bearing loan from me to him.

A partial 1031 would work and he could put you on the deed. He makes $300K profit, exchange partial would let you get the next property and he will have to pay the gains on relinquished. This really depends how much you have invested on whether or not it's worth it and how much depreciation recapture he would be subjected to