If you have a easy going seller they could work it like this.1031 exchange sounds good in a perfect world for post disposition.

Then go to several sessions of Small Claims Court to see how it works and disposition of cases.

When I write the final report for the disposition of the security deposit I include even those items that I will waive, so the tenant sees the cost to me for things I did not charge to them, hence the value they received.

Also look into "partial disposition."

The good news is you can do partial disposition of the old sewer line and take the loss.

Sec. 1.469-9, you will essentially trap your suspended PALs.You mentioned some of the CPAs you spoke to told you that you won't be able to deduct those suspended PALs until you sell a property (entire disposition).

This way it's easier to do a disposition later on down the road without having to pull up old records and carve the unit of property out of a larger group. 

@Eric Skiba Google around and get a quote for smoke smell remediation.Then include that in your deposit disposition statement which should be provided to the resident according to State of Connecticut law.That is certainly deductible from the deposit. 

@Ian Ippolito it was a disposition fee paid to the sponsor on sale.  

The original owner's only realistic protection before selling to you was either withholding shares in the LLC and constructing disposition of assets in such a way that they would have to sign off, or securing a first position lien against each property.