I currently have my house and 40 acres of property in my name.

When I purchased it, my father was interested in 1/2 of the property for his landing strip..........he has been making 1/4 of the mortgage payment for this part of the property.

We currently still owe about $60K on the ground.

My father phoned today, and asked if I would be interested in this scenario;

1) We subdivide the property in half

2) He pays his 1/4 as a lump sum against the balance ($15K).

3) His half is his, mine is mine..........I apply the 15K against the principal and assume responsibility for the full payments.

Now............it helps to understand that my father looks out for ONE person....himself. He is not opposed to, and has a history of screwing over anyone else, including family members.

Any thoughts on this deal?

That being said about your dad, I would be learie of possible further subdivision, wherein he adds 100 new neighbors for you to live next to.

Or he takes his share based on the price you paid X number of years ago and turns around and sells it at todays going price, and again, you have new neighbors.

Either way, my recommendation is to leave it as is and if he doesn't like it, buy his share back - of course at the price X number of years ago...

Otherwise, if you do agree to subdivide, go through an attorney and put restrictions on the deed to prevent further subdivisions without your approval.

Exactly what john said.

ddandb

if he is at the door, slam it.

if he is on the phone, hang up.

I was thinking right along Redlegs response, and Andy I expect this is also something in the back of your mind.

If you don't trust him I would be leery of subdividing.

I believe we BOTH ave visions of leaving dodge before long.

If he is insistent (and he will be), I will suggest that he pay the $15K to get out from under the debt.

We will agree that when I sell the property, he will be entitled to 1/4 of the sale..........it will be worth more without a line through it anyway.

Andy –

If I were you I would NEVER agree with that. I guess I can be a cynical when it comes to family matters due to the fact I am not close to any of mine, but over the years I have learned to spot a red flag and this sounds like a red flag. My wife and I own a lot of land in central Illinois and I would never give it up. My first question would be what’s with this new idea? Why the interest in sub-dividing the land? If you agree on this what you should do is say ok its fine to do this, but if you ever decide to sell I get first rights at an agreed upon price. I would have a lawyer draw up a contract that says if your father ever decides to sell you get the land back at the original purchase price. If I were you all I would be thinking about is a damn subdivision in my backyard. -- Gunflint

already worked it out......

HE pays $15K to be absolved from responsibility for his share of the payment.

ALL the property stays in my name.

IF I sell, he gets 1/4 of the selling price.

That seems perfectly fair to me......PLUS I have 100% control of the mortgage (can make extra payments, etc).

Sounds good.

smart

I'm suspicious of the subdividing part. If 15k will be a lump sum to avoid further payments, that's fine.

As long as it stays in your name I would not be concerned.

and.....NO kickbacks to the state/county/city for subdivision.

Get it in writing and have both of your signatures notarized.

actually heather,

I'd rather keep this an informal agreement.

My dad remarried recently, and although she is a pretty decent woman, I'd rather not owe her anything if my father passes away.

The deed is in my name.

I'm not an accountant but I believe that the IRS would consider this a gift from your father to you (assuming that there wasn't any kind of sales agreement draw up between you and your father - in which case you would have to pay sales tax on the $15K). Only $11,000 of the $15K is excluded from taxation (I believe that the rate on the $4K is 47%). Your father will have to "account" for this transaction on his taxes and it could possibly (but unlikely) "trigger" an audit on your taxes. You also have to consider that you and you alone (as the sole owner on the property) will have to pay for any income generated when and if you sell the property. I'd talk to an accountant to confirm my "theory" on this. Oh and I did stay at a Holiday Inn last night.

didja take the towels?

I believe that the yearly gift tax has been raised to 12,000 for 2006

No towels just a ton of those little bars of soap.

I always grab the soap as well... helps ease the pressure when standing at the checkout desk and giving them money for a broken back... winter months I always borrowed the towels and stuffed them in my chest area to stay warm on the bike.. I learned this from another Rider Buddy of mine.. God Rest his soul!

Hog