You should both sit down with an accountant and discuss the situation to make sure both of you fully understand what you both end up with. There are likely to be things that you haven;r thought of or mentioned.
First you must start with the original statement of adjustments for the purchase. Do not deduct the down payment. The property cost what it cost. The how and when does not matter.
Purchase price, plus property tax adjustment, potential water and sewer adjustment, potential land transfer tax, plus legal. Then add your improvements to the land if any. Use the property tax assessment to determine a percentage of value to the land and to the building.
Then add your improvements to the building, and finally, add your asset additions, such as appliances. The appliances and the building must have a separate calculation to determine how much, if any, capital cost allowance was taken. That has to be added back. Once you have the total accurate cost. Then you split 50/50 to find out your actual cost for your share.
You receive the agreed on price for your 50% share, less your 50% of the cost, less legal fees and adjustments, the the lawyer will pay out your share of the mortgage and penalty out of what looks like non-existent profits. Looking at your calculations, which aren't correct or complete, you are likely to end up owing money.
I don't see why commission is necessary. You don't hire a realtor to sell half the partnership. That should be an unnecessary cost.
Your partner would not record anything. All he has done is added to his cost, and holding. He will pay capital gains, hopefully, when he sells it.
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