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wickedkittylitter t1_j29lt8w wrote

A gets $20k off the top and the remaining $80k is split between A and B.

A get a total of $60k and B gets $40k.

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HurryPrudent6709 OP t1_j29n2pv wrote

Thanks, that was my take as well. How do I explain this so they understand?

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wild_b_cat t1_j29o1mx wrote

Look at the math for each person. A put in 20 and got back 60. Their result is a gain of 40. B puts in zero and got back 40. Their result is the same as A's.

The way they're doing it (adding & subtracting 20) would make sense if A gave that money directly to B*.* But they didn't give the money directly to B - they put it into a shared asset. If A&B have shared ownership, then A was really giving half of that money back to themselves right away, leaving only a 10 imbalance that they were 'giving' to B. If you do it that way, then you say that B owes A that 10, so you subtract 10 from B's share and add it to A's share. And you wind up with the same 60/40 split.

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