TP is contemplating purchasing a duplex with some relatives (4 people on the title – 2 sets of married couples). The relatives will live in ½ of the duplex, and the other ½ will be rented out, and they are still deciding how to split the rental portion.
If rental portion is 100% to TP while relatives live on the other side (so 50-50), should the title best be held as joint tenancy between the two parties so that we can allocate the expenses/income to those who actually pay/receive the income? IS TIC better? On the sale of the building, the relatives would get personal residence exemption, while the TP pay the capital gain on the other ½? Seems a bit off that relatives get tax-free gain, but flip side is TP gets all income and deductions. Is there any sort of “evening-out” decisions that need to be made? Often duplexes are purchased by one person who then lives on one side and rents out other, but am unsure what to do in this scenario. Any thoughts?