So in the initial death year, the partners estate would receive the benefit of stepped up basis until it is then passed along to the heirs. 

[Sale Price - (Original Purchase Price + Improvements) = Gain] In order to benefit from the $250k exemption, must be primary residence, lived in 2 out of the last 5 years, can use this once every 2 years.Looks like there's no capital gains Tax in Washington.

I am wanting to move out of my current residence, and because of other benefits such as the experience I'd gain and the access to a low downpayment, all signs point to house hacking.

Even if a property only nets 300 a month it would be great on the appreciation and tax benefits alone.

We should give them the benefit of the doubt considering somewhere along the family line we were all immigrants and these people may just want to have a better life for themselves and their families.With that said, there are a few things to consider:-What market are you in?

I don't see any kind of benefit to being setup that way IMHO.

Since your current portfolio is generating healthy cash flow, you might benefit from diversifying into an asset that provides a mix of stability and growth.

Consider the Costs and Benefits: Legal action can be costly and time-consuming, so it’s important to weigh the potential outcomes against the costs involved.

How have they benefited you?

The current tax code provides special benefits in this situation.When the original owner passes away, the "basis" of the assets resets to the market value at the date of death.In the US, there is currently an estate tax exemption of approximately $13 million per person, which allows the basis to reset, and depreciation can start anew.This “step-up in basis” is particularly useful if the next generation wants to sell the asset.Since their basis is set at market value, if the property is sold at that value either at the date of death or within six months, there is no capital gain and no taxable event.There have been many examples where portfolios of fully depreciated real estate worth tens of millions of dollars have been passed down from one generation to the next, resulting in little to no tax liabilities for their heirs.Pretty cool, right?