NJ Rental - Out of State Long Term Capital Gains

[Jim Froehlich]

Trying to help a friend plan - he's got a (3 units) rental in Northern NJ worth about $800-850K (his father transferred it to him as gift or $1 back in 2007). He lives in MA - in trying to sort out likely tax hit for him if he sells outright, it seem like maybe there is a maximum 20% long term capital gains right now - I don't know if that includes the Transfer Tax and the Income Tax of NJ (or Exit Tax) or Federal tax, etc?? So between state and federal, looking for a likely bottom line worst case tax hit for $800K gain after 13 years owned?? In addition, he might spruce up the kitchens and set rent to get about $60K/year NOI and just hold, but he wants to quit managing and doing R&M from distance (driving down or answering tenant calls, etc.), maybe get some funds out now without refinancing - anyone reading this ever "sell a piece" of their rental and set up an LLC with operating agreement to bring a limited partner in who manages, while the primary current owner slips to a passive spot and collects his portion of income monthly or quarterly? Thanks!