While under contract, we perform due diligence and there will be some soft costs incurred. 

A CPA who specializes in partnership issues can also likely talk through these issues with you.3) Depending on the size of the deal - Keep It Simple - the number of really complex agreements that come across my desk for a $500k property is crazy, and it ends up costing as much to do those tax returns as a comparable $5m deal

I’m sure you won’t be verbally assaulted about how greedy you are Basically they were gifted $60-$120k tax free. 

I’ve done a lot of research on these projects, so feel free to ask any questions here.

How are you planning to fund the rehab costs?

I am looking to buy a property in SLC Utah that i would want to try and run as a STR to help offset the cost.

...And what the buy-in cost is?

I think it depends on the area and insurance costs.

At this point since it's after the fact while not totally correct; you may explore adding the missed asset/basis amount as a selling cost to just reduce your gain. 

I know that if a cost seg, l would need to back that out of my California return.Your answer seems to confirm what I suspected.