Goodluck with however you proceed.

Since you can allocate your proceeds any way you want. 

Purchase price: $200,000 Pair of duplexes purchased with 1031 proceeds from a previous sale with about 75% financing.

Most of the time, you are better off selling the home and getting the proceeds tax free and using that to buy a rental.

For me that number is $200,000.Liquidation Option: Sell all assets at a 50% loss, proceeds would only be sufficient to pay down a portion of the business debt, the rest would need to be covered with personal savings or income.

Ultimately we decided to proceed with them and signed a 1 year lease as normal.

@David Lund Primary financial goal is to sell my STR and invest all the proceeds into BAM's next Fund!

Their tax advisor proceeds to let them know all the problems, and amendments need to be addressed by 3/15 of that year to be respected for the prior year :)For the sophisticated investors...the CPAs are (almost) always a part of the conversation with the attorneys when there are LPs involved. 

But if you purchase more than you sold (say you used the proceeds to buy two replacement properties totaling twice what you sold). 

Additionally, there's a fixed self-employment tax.Income Tax: 22% * $70K = $15.4KSelf-Employment Tax: 15.3% * $20K = $3.06KTotal Tax Due: $18.46KRemember to account for any state taxes as well.To defer taxes entirely, you could utilize a 1031 exchange, which allows you to reinvest the proceeds from the sale into a similar investment property, thus deferring the tax payment until a later date.Example #2: Long-Term Capital GainsNow, consider a scenario where you hold onto the property for over a year.Project Details:Property Cost: $70KRenovation Costs: $50KResale Price: $200KProfit: $80K ($200K – $50K – $70K)Since self-employment tax doesn't apply, you only need to calculate the long-term capital gains tax.