So in your example you would only pay tax on the $5K and all remaining profit and depreciation recapture would stay in the exchange.

@Zabrina HortonWhile one can partner with their IRA or solo 401k to invest in real estate by pooling their funds in an LLC, for example, very specific rules apply including not receiving any type of commission and not using debt financing.

To take this example to the extreme, imagine that one person took out the mortgage but 20 people were on title.

This strategy was very, and still is popular in hot Markets like Texas and Florida for Example. 

For example the 70% rule for fixer upper properties.

Sometimes (as an example) you will say, "I will deed the property back to you for $5,000" and the taxpayer will say, "I'm not going to pay you $5,000, I happen to know I can redeem for what you paid the state plus a little extra interest." 

For example, you can say "Rent includes up to $150 in utility use.

For example if you know the property will appraise for 200k and the bank will give you  80% LTV, then you could refinance 160k. 

For example, you'll want to see that they're approved for 3 bedrooms if you're renting out a 3 bedroom property.If the voucher looks good, and it's an applicant you think you might be interested in renting to, then you'd have them fill out an application and you'd screen them like any other applicant.   

I fell into it and I'm a prime example of how a fool can get lucky.