Allocation of the purchase price is negotiated... buyer and seller have different interests.

The difference between the purchase price and the financing amount is the amount of money you brought to the settlement table (this is your initial equity in the property).You need to allocate your total purchase price between the land and the dwelling structure.  

The language in the original lease should be clear regarding how these funds were allocated. 

Here is an example of a property that I've bought:Duplex:Purchase price - $59.5KTax assessment - $63K ($26K for land, $37K for building)Appraisal - $67K total valueThe best I can come up with is to take the $26K for land and divide this by the $67K appraised value, to get 38.8% of the value allocated to land.

A and B have to pay tax on their share of the earnings C allocates to each.

Just like any other distressed property, just be sure to allocate a day or two for the massive trash out that'll need to be done.

This is a real estate forum but surprising to see how much proper asset allocation focused towards a healthy mix of ETFs/index funds (and a mixture of RE products) gets bashed here.

The only thing that is unclear would be the 10% equity for Hosting and Maintenance as 100% of the appreciation would be allocated to Mort Resp and Cash in.

If it is the latter, there has to be an allocation involved and if it is the former, there are no issues as it qualifies since it  is solely the land ( Real property )  dad is being exchanged.

And you can allocate those proceeds however you want.