Shared equitation agreements generally involve two parties: an “occupier” and an “investor.” The occupier is the person who lives in the apartment and the investor provides cash to be used for the down payment or to unlock equity. In most cases, a traditional bank mortgage is also involved. For an agreed term, the occupant lives in the house, maintains it and pays all costs. At the end of the term, the occupier buys the investor or the house is sold. In addition, both parties will pay additional legal and accounting costs. If your equity starts to multiply over time, ask your accountant for an 83 (b). If a person files an 83 (b) within 30 days of receiving equity, he allows him to pay taxes on the anticipated amount instead of his amount of free movement. In a capital agreement, it is important to be clear in your definition of the work expected by the recipient as well as the performance standards that must be met in order to obtain the equity. Say that a person wants to buy a house, but they cannot afford to do it alone. If a parent is willing to help the individual buy the home, they can choose to help the individual by entering into a shared equitation financing contract. In the agreement, both parties obtain conditions that vary from one situation to another.

A simple private equity and private equity financing contract that provides basic protection with a minimum number of documents. It does not seek to create tax advantages for investors. Suitable for use with family members or friends for whom the investor is not looking to save tax. To determine whether the share of shares should be structured to create tax benefits for the investor, it is important to balance costs and benefits. A central question is whether the investor can actually benefit from the tax benefits because of his or her overall tax situation. Another question is whether the creation of tax benefits for the investor will reduce the tax deductions available to the occupier. The answers to these two questions vary by party and property, and it is advisable to consult an accountant or lawyer. One of the most important changes in the distribution of shares is whether the parties intend to create tax benefits for the investor. If investors want tax benefits, it is necessary for the occupier to pay the monthly rent to the investor for the use of the percentage of the property that the investor owns. When this approach is adopted, the investor usually uses the total amount of rent to pay for property-related expenses. The result is: (i) the total monthly expenses of the occupier are the same, as if no rent had been paid (since the amount the occupant pays in rent is offset by the amount that the investor contributes to the operating costs); and (ii) the investor has no taxable income (since the amount the investor receives as rent is offset in dollars per dollar by the amount he/she contributes to property expenses).

The only point of the lease transaction is to allow the investor to obtain a deduction from depreciation tax.