I suppose the two mortgagees could agree to a common vehicle to take title and then have the pro-rata split but that would be a mountain of work and not likely on a residential asset.    

The only thing that I would add to his response is to keep in mind in that in a 1031 exchange, the capital gain calculation is reversed such that the IRS looks at every dollar taken out first as gain plus ( Federal and State level)  along with any pro rata share of depreciation recapture and then basis.  

If you can't have separate meters or a sub meter then you'd just pro-rata the water bill and have it reimbursed to you.

This is further complicated by depreciation recapture, assuming this was not just vacant land...not if that gets paid before cap gains or pro rata with cap gains...a cpa will know  

Then charge pro-rata on overages based on the square footage.I think that would make it a little easier for tenants to accept that without getting angry over each other's utility usage. 

Some other rules apply such as pro-rata rules if you have other pretax IRAs such as SIMPLEs and SEPS, so you should seek competent help from tax advisors for questions regarding the taxation of their conversions.

You bill on pro-rata share or meter the spaces separately depending on the size and type of building.

I also like the fact that the association takes care of exterior maintenance and those costs are lower pro rata than if I contracted myself fro a stand alone.  

That'll cut their bills in half and is the fair pro-rata.

The rule requires you to reduce pro rata the amount of profit you exclude from your income based on the number of years after 2008 you used the home as a rental, vacation home, or other “nonqualifying use.”Example: Jane buys a home on January 1, 2009 for $400,000, and uses it as rental property for two years.