Tracking the tax basis and tax capital will come in handy in determining the taxability of your distributions and aid in gain/(loss) computations on the day you and your friends want to exit the deal.

You also need to be cognizant of the gift tax implications here - if you gave your parents $100k that wasn't a loan - you made a taxable gift and should have filed a gift tax return. 

-His Taxable Gain is $6M, the $1.5M difference is his return of capital for simplicity purposes.d He can do anything he wants with that $1.5M tax-free.

@Evan Tan, I do believe gambling winnings are taxable and paying income tax on it would give you documentable income which you need to get financing. https://www.irs.gov/taxtopics/tc419

Apparently Freddie and Fannie only will look at my taxable income and won't even consider the business.

Yes, interest income is taxable to you.

@Sherri Schmonsky - Are these stocks inside a Roth IRA or taxable account?

Alfonso will need to discuss the topic with his plan administrator to see if what you propose is A) allowable and B) something they will facilitate.That is about all I can add to the topic, but wanted to point you towards the starting point.I do not foresee any US side complications, though it is possible any income to your partner may be viewed as taxable by the US.If you find the RRSP is in a position to make the transaction, you will want to connect with an attorney in Canada who can evaluate any tax/legal issues for Alfonso.

You'll need to know what that is to determine your taxable gain.

The increase of the basis will help you minimize the taxable gain when you eventually sell the house.2) Improvements made on the rented side will also be added to the basis, but you can depreciate the improvements on the rental side and deduct depreciation against the rental income.