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Vancouver Off-Topic / Current EventsThe off-topic forum for Vancouver, funnies, non-auto centered discussions, WORK SAFE. While the rules are more relaxed here, there are still rules. Please refer to sticky thread in this forum.
Lily bought a condo for $440,000
Lily put $70,000 down payment
Lily's mother added $20,000 for the down payment
Lily moved in with boyfriend (Mike) and is now common-law with him and has two children together.
Lily just sold the condo today for $749,000.
Lily and Mike refinanced and there is $521,000 currently left on the mortgage.
What would be a fair way to split the gains.
I was thinking $749,000-$521,000 = $228,000 left in cash.
Give Lily back $70,000 for down payment
Give back Lily's mom $20,000 for down payment
$228,000 - $70,000 - $20,000 = $138,000
Put $138,000 into Lily and Mike's Joint account.
Does that seem fair?
Lily likes my idea above, but Mike thinks all of the proceeds should be going into their joint account.
Haha. ofc this Mike guy wants everything to go into the joint account, he didn't contribute anything to the DP.
Would probably depend on what Lily's mom's expectation was. If the $20k was a gift with no expectation to be paid back, then sure, give her $20k as a thanks, but that doesn't give her any of the appreciation on the property and she probably lost money given inflation.
On the $70k, would probably want to take some gains of the table for that just for Lily or she is giving gain away if they end up breaking up.
Best is to probably calculate what everyone has contributed toward the equity of the property and assign the cash that way.
The carbon tax is there to create a dis-incentive for continual use of stuff that will contribute to a larger carbon footprint. You pay it in your gas so that you will either drive less (haha~), switch to a more fuel efficient car (maybe), or get into an EV (we know how the math works there lol~). Same deal with any form of carbon-based home heating solution. You can avoid it if you switch to heat pumps, or pay less for it if you better insulate your home.
Of course, I generally think providing incentives to induce the desired behaviour tends to work far better than creating dis-incentives that penalizes the undesired behaviour. So I am not praising the carbon tax as the holy grail that will help us achieve reduced carbon emission levels.
But it is the Liberals' key piece of federal climate change action policy, and in the climate change portfolio, the Conservatives have absolutely nothing other than vague talks. In the face of highly visible and worsening climate extremes, having something to go on certainly seems better than not even attempting any sort of federal level coordinated solution.
If the Conservatives have some kind of semi-viable plan, I'd love to hear it from PeePee too.
Quote:
Originally Posted by JDMDreams
But why have a tax in the first place, how many cra, bc gov paper pushers did you hire, have to pay, envelope, materials to print cheques, complaints, postage did you waste creating essentially something that does nothing. Bc carbon tax is separately from federal so it's also ndps fault on making this cash grab.
How about we create a hobo tax, then just give them money back every month like we already are with welfare
Where's my used car, house PST tax rebate, my alcohol tax rebate
Lily likes my idea above, but Mike thinks all of the proceeds should be going into their joint account.
It would really depend on how they manage the rest of their finances.. do they combine their income, or do they split the bills/mortgage and keep their own private accounts, etc.
IMO, I'm going to treat them as married and I think the entire sum should go back to their joint account. The Mom doesn't get anything unless the original $20 was structured as a loan (but I assume it was a gift).
If they decide to gift the Mom back $20k, that's up to them.
__________________
I searched for truth, and all I found was You
This one is actually a close friend. I'm known in my circle of friends as the finance/investment guy. For some strange reason, people think my opinion matters (they're crazy, I know). So people always come to for advice. It's my cross to bear... and in turn RS' cross to bear because I don't know what I'm doing half the time and need help. RS is my therapist, life coach, consigliere, etc.
I'm assuming they were living in it?
Common-law/married is legally entitled to half the increase in value from the point they became common-law/married until the date it's sold.
Legally it doesn't matter about the downpayments, unless Lily and her Mom got Mike to sign some shit when they became official it's a moot point. Half the increase in value is his.
Being reasonable he should back off, wasn't his $ in the first place, but if he's being a dick about it, you gotta wonder why. That said, you can get a realtor to go back to the point where they were legally common-law/married and tell you what the home was worth at that point in time and then deduct that from the selling price. He's legally entitled to half of that amount.
If it was a side place that Lily owned and she had it before they got together AND she kept all the finances separate... it's 100% hers, he can fuck off. If she ever used mix money to pay for it though she's fucked. If she bought it while they were already common-law/married, likewise she's fucked.
This one is actually a close friend. I'm known in my circle of friends as the finance/investment guy. For some strange reason, people think my opinion matters (they're crazy, I know). So people always come to for advice. It's my cross to bear... and in turn RS' cross to bear because I don't know what I'm doing half the time and need help. RS is my therapist, life coach, consigliere, etc.
You a busy man
You got that dumb ass church ah mo friend, some other idiot with a whole apartment that needs to be sold, a finger up your bum bum, and now these idiots.
The carbon tax is there to create a dis-incentive for continual use of stuff that will contribute to a larger carbon footprint. You pay it in your gas so that you will either drive less (haha~), switch to a more fuel efficient car (maybe), or get into an EV (we know how the math works there lol~). Same deal with any form of carbon-based home heating solution. You can avoid it if you switch to heat pumps, or pay less for it if you better insulate your home.
Of course, I generally think providing incentives to induce the desired behaviour tends to work far better than creating dis-incentives that penalizes the undesired behaviour. So I am not praising the carbon tax as the holy grail that will help us achieve reduced carbon emission levels.
But it is the Liberals' key piece of federal climate change action policy, and in the climate change portfolio, the Conservatives have absolutely nothing other than vague talks. In the face of highly visible and worsening climate extremes, having something to go on certainly seems better than not even attempting any sort of federal level coordinated solution.
If the Conservatives have some kind of semi-viable plan, I'd love to hear it from PeePee too.
Ah yes.. replace my 99% efficient gas furnace with electrical heating
I pay under $100 every 2 months in the winter to heat 1400 sq fr via gas furnace
On the flip side I pay $500 every 2 months to heat 700sq electrically
That will prevent our Smokey future..
__________________
Dank memes cant melt steel beams
Common-law/married is legally entitled to half the increase in value from the point they became common-law/married until the date it's sold.
Legally it doesn't matter about the downpayments, unless Lily and her Mom got Mike to sign some shit when they became official it's a moot point. Half the increase in value is his.
Bingo. These "friends" should really read the relevant legislation or information from the government which is actually written in plain English:
As someone who has been married for almost 10 years, we treat all of our finances as one because what's the point of being married/common law if you're not working towards shared financial goals? If these friends are going to be petty about it, it sounds like they might need to have a broader discussion about their relationship.
If they break up, the law is pretty clear in this province and that's how the assets and liabilities will be divided.
On the flip side I pay $500 every 2 months to heat 700sq electrically
Are you running a grow-op, or do you keep the doors open in the winter to let the fresh-air in? We're in a 900sqft place that uses electric baseboards and it's around $160 every 2 months on average. It spikes to $250 in the winter.
This one is actually a close friend. I'm known in my circle of friends as the finance/investment guy. For some strange reason, people think my opinion matters (they're crazy, I know). So people always come to for advice. It's my cross to bear... and in turn RS' cross to bear because I don't know what I'm doing half the time and need help. RS is my therapist, life coach, consigliere, etc.
I too get asked these life changing questions. Who I then blast to every other CPA I know. I guess the tea is interesting.
Legally in your situation, I think because of kids, it may be considered a marital home aka all proceeds into joint account, I don't even think the mom will get back the $20K DP.
If it's common-law without kids, it'd be pro-rated by the years you lived on your own vs common-law. Then the new gains from all assets between Lily and Mike are split.
But neither of this apply to them, so what's closest to fair without a complex calculation is what you said below.
I was thinking $749,000-$521,000 = $228,000 left in cash.
Give Lily back $70,000 for down payment
Give back Lily's mom $20,000 for down payment
Just found out Parkland is selling 157 gas stations across Canada including 9 in BC. All via sealed bid for each station. If anyone wants a look www.cstorebids.ca You have to sign up and sign up to view but it takes like a minute. Even after the sale parkland will be making money because they all have a 10 year fuel agreement that I believe will be with Parkland.
__________________ Until the lions have their own historians, the history of the hunt will always glorify the hunter.
The condo was $400k, and Lily + her mom paid $90k up front. That's right around 20% of how much the condo was.
Next we need to know how much Lily has paid into the mortgage before Mike came into the picture. There are complexities in here as well because mortgages are inherently interest-heavy in the beginning, and light near the end, so I don't think a linear calculation on the contribution is fair. But essentially, let's say the total 30 years' worth of mortgage payments would amount to $800k, and Lily has paid it down to $700k by herself before Mike came into the picture, and they started living together.
To me, this means Lily has paid off another 10% of the apartment, meaning that she and her mom should be entitled to at least 30% of the apartment's worth.
Now, the apartment sold for $749k. 30% of that is $224.7k. That amount needs to go to Lily and her mom. How they split that between themselves is their problem.
This means there is $524.3k of proceeds from the condo sale. Assuming you do a 1/2 and 1/2 split here, each person gets $262.15k.
The re-financing of $521k needs to be looked at on its own as a completely separate transaction, and I am not sure where it came from. Did Lily and Mike buy a new house together? As they are a common law couple now, they'll need to work out their own split on how much each person pays into that $521k mortgage.
They also need to ask themselves how much from that $262.15k each person wants to contribute back into their new mortgage.
There is no "fairness" question to be asked. The only fair and definitive part is the intial 30% (or however much it was) that Lily and Mom and contributed, and ROI needs to be calculated for that portion. You can't just pay Lily $70k, and Mom $20k, and call it a day.
Of course this doesn't sound like an easy situation. Did Mike contribute to Lily's mortgage? Is she on title on his mortgage? Is he going to put a ring on it?
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Lily was living in the condo initially (1br)
Then Mike moved in, I'm don't know when exactly.
Lily and Mike upgraded to a bigger place that's why the mortgage is bigger now. She doesn't remember how much was left on the original mortgage. So they kept her original condo as an investment.
Right now, they pay all expenses 50/50. She makes $80k and he makes $140k. Which I don't think is fair to go 50/50, but that's another issue.
She's knows she probably deserves more, but she just wants the deposit back, which seems more than fair. Mike is just being greedy, I feel.
In 30 years none of these carbon taxes people are indifferent to are going to leave your children in a better world than they would have been otherwise.
The virtue signalling through emissions targets and completely frivolous donations and spending are likely the end of most “middle class” people who are on the borderline now.
Spend 15 minutes and watch this video and I guarantee none of you could say with a straight face that this is the right approach. Love to see that failed Olympic hero Adam Van Kouverden is now an MP, he’s surely an extremely qualified expert on climate change and carbon pricing given his degree in.. *checks paper* Kinesiology..
Lily was living in the condo initially (1br)
Then Mike moved in, I'm don't know when exactly.
Lily and Mike upgraded to a bigger place that's why the mortgage is bigger now. She doesn't remember how much was left on the original mortgage. So they kept her original condo as an investment.
Right now, they pay all expenses 50/50. She makes $80k and he makes $140k. Which I don't think is fair to go 50/50, but that's another issue.
She's knows she probably deserves more, but she just wants the deposit back, which seems more than fair. Mike is just being greedy, I feel.
While Mike makes good money, he is penny wise pound foolish. If he has any desire for a long term relationship, they should offer lily’s mom her down payment back plus her % of profits. .
If this was my MIL she would be pissed off if she wasn’t offered her fair share in return (even though she would turn it down). She would say her daughter is dating some taam Cheen dumbass.
This one is actually a close friend. I'm known in my circle of friends as the finance/investment guy. For some strange reason, people think my opinion matters (they're crazy, I know). So people always come to for advice. It's my cross to bear... and in turn RS' cross to bear because I don't know what I'm doing half the time and need help. RS is my therapist, life coach, consigliere, etc.
Have you told them about the butt stuff? That'll probably stop them giving a shit (pun intended) about your opinion and let you live your life in peace.
__________________
Quote:
Originally Posted by skyxx
Sonick is a genius. I won't go into detail what's so great about his post. But it's damn good!
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I've gotten some pretty good info here. Which, i'm going to give to Lily. Way more perspective than I could give on my own. I'm not going to pretend like I know everything. I'm going to lean on my resources when I can, and I see RS as a resource.
I think it's a win win for everyone. We get to discuss it and hopefully some other members get some insight and learn.
She's knows she probably deserves more, but she just wants the deposit back, which seems more than fair. Mike is just being greedy, I feel.
As has been said already, they are common law... there is no point to saying things like "she deserves more" - it's going to all end up in one pot regardless.
And he makes almost 2x as much as her, which means over their lifetime, she is going to spend a lot more of "his" money if you want to be pedantic about it. If you are married or in a marriage-like arrangement, it's a waste of energy and brainpower to try to be this granular.
-Mark
__________________ I'm old now - boring street cars and sweet race cars.
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