There’s a major advantage here, especially for the seller, as it can help them defer capital gains taxes.

A lot you can gain from these forums, but some you just have to jump in and learn.  

How will the capital gains and rental income be taxed (not just by US, but by Canada as well)?

Simply put, the smaller the variance between the basis and the sales price of an asset, the less capital gains taxes are due from the sale.

Here's why this happens:The ARR is simply the average of the annual returns, without considering the actual capital invested or how much money is lost or gained over time.

To answer your question, the advantage the GP has is control, and the ability to gain wealth from their equity position (hopefully not so much for asset management fees) by selling at a big gain.  

Since you lived in the condo until September 2021, you could be eligible to exclude up to $500,000 of capital gains (as a married couple) if you sell before September 2024.

We thought that it seemed like SROs fill a valuable niche, and that property owners who manage them stand to gain high-density cash flows commensurate to the high-density living.How did you find this deal and how did you negotiate it?

For context, (1) the property was in poor condition when I acquired it, and (2) I’m a passive real estate investor.Here are my expenses:- Travel (~$2,000) and meals during travel ($500)—I understand only 50% of meal costs are deductible.- Gardening maintenance (just to prevent the grass from getting too high, not an improvement).- In-year tax consultation ($300).- Commission to my buyer’s agent ($300).- Insurance premium ($1,000).- Insurance deductible following a claim ($1,000).I believe the property won’t begin to depreciate until it’s in service, which seems to align with how TurboTax is set up.

Not to mention if you profit $10,000 or $20,000, you have to pay capital gains tax on it.