Tax implications on a 1031 exchange that you gifted but then became a mtg coborrower

[Julie Timm]

My husband did a reverse 1031 exchange on a property over 20 years ago.  He has never lived on the property.  His intent is to totally gift the property to his daughter as her inheritance.  It was originally held in his trust.  She did not qualify for a mortgage loan to build on her own so he became a coborrower which meant he had to be on the title.  The property was an acreage held for investment until approx 4 yrs ago.  She has lived on the prop for 3 years.  She, and her husband who is an Australian citizen, are returning to Australia once they sell the property.  We are unclear as to who will be responsible for the capital gains and how it will be calculated, especially since he is still on the title.   Can anyone help?