It's always a good idea to get professional advice when it comes to taxation.

Correct - there is no taxation of the cash-out amount, it is a loan, not classified as income

And you should not pay transfer tax at assignment no matter who is transferring (LLC or a person). 

Even with slightly higher interest and the exposure to UDFI taxation, leverage still works as a positive accelerator for return in an IRA environment.

He can do even better by keeping it in the roth IRA so he won't pay taxes on the earnings nor will he when he later withdraws it.He will pay tax at the ordinary rate with no penalty.

Some generate rents taxable on Schedule E. etc...Here is a link to a thread in which I discussed it: http://www.biggerpockets.com/forums/12/topics/76052-simple-taxation-questions-Steven

When you use them to run an active business out of your 401k - the gains will be subject to UDFI tax at about 35%.

SEV is not a common, nationally used term in property taxation world.

That would mean a capital gain tax of 200,000 PLUS state tax of 5% = 50,000.Personal tax total: 250,000Total tax on dividend/ distribution = $563,841.This is why it is considered malpractice in some states to advise holding real estate in a C-corp.You LOSE the Long Term Capital Gain Rates with a corp.You will pay tax at the corporate rates:TAXABLE INCOME: TAX:Over But not over Tax +% On amount over$ 0 $ 50,000 $ 0 15% $ 050,000 75,000 7,500 25% 50,00075,000 100,000 13,750 34% 75,000100,000 335,000 22,250 39% 100,000335,000 10,000,000 113,900 34% 335,00010,000,000 15,000,000 3,400,000 35% 10,000,00015,000,000 18,333,333 5,150,000 38% 15,000,00018,333,333 ............ ............ 35% 0Skewed Step up in Basis for HeirsNow, lets say you keep that Rental property in the corporation forever, Yes you can 1031 into something else; however, your kids will not receive much of a benefit as the deemed sale of ANY transfer will cause taxation.

Rik,I recommend finding an accountant who specializes in real estate taxation.