Rental Property Exchange following divorce

[Bonnie]

Couple divorced and had 3 rental properties. For 2012 they shared income and expenses and each put half of each on their tax return. In Aug 2013 the ex-wife quit claimed 2 of the rental properties to her ex for $1.00 each and in exchange she kept the equity in the 3rd and took it as her home and financed the balance owed on that property and moved into it. How do I figure selling price for the disposition of the rental property? Never had this come up before. Thanks in advance

[Jiggers]

You need a copy of the divorce decree to see what the property settlement is.

There is no gain or loss with a property settlement that is part of the divorce decree.

[joanmcq]

Had a similar situation with my own divorce. We quit claimed properties as part of the property settlement. Each steps into the shoes of the other. For example, treat the rental she got as though the full value of the property was always all hers, moving any depreciation & the basis onto her depreciation schedule, then treat as a conversion to personal. His rentals get the full basis, plus any depreciation she took in 2012.