I believe the code says "if a veteran holds legal title to a property secured by a VA loan but does not possess equitable title, this situation is considered 'not a disposition."

I am looking to purchase real estate for both investment purpose as well as to offset as much tax liability as possible. 

I liked the tenant, school is starting back etc, I told them they could pay first month and security deposit and I would let them have the rest of August for free.

So all of the gain and depreciation recapture are initially still tax deferred.However, like Joe said, the down side is later when sold  you lose the 1031 option. the client will pay tax on all gain and depreciation recaptured from before the 1031 also. 

I have family in Houston, Dallas, and the Valley, I was networking with brokers in San Antonio, but the Taxes seem to be quite high as well in that State, although much favorable laws/regs on the landlord side.

The sellers you are dealing with in these situations don't deal with prorating Taxes, or any other kind of prorations, that is what an escrow agent does. 

although we bought about 6 years ago or so for 270 put 100k into it so you can do the math  no debt .. hoa 400  we pay utls. 200 or so.. so 600 a month out of the 3500.. tax's about 1500 a year ( got to love Vegas taxs ) value today right at 600k.. so lets say we net about 33k a year on 370k cash .. so not bad little under 10% COC with an outstanding tenant one of the best I have ever had.PS given tenant quality we manage ourselves.. 

If you think ahead, you can minimize recapture with the right tax planning.So what is recapture?

All mortgages contain a “due on sale clause” which states that the lender may, at its option accelerate (call note due) if a transfer of the property securing the note takes place.  

Be sure to hold a hefty reserve to handle on-going maintenance, capex, taxes, and insurance.