The post was trolled and then moved from Tax section to Classifieds section by BP.... 

If it's in a high tax /flood area taxes and insurance could easily be 5-6k or half that then with title insurance points and closing it could make senseWhat is the breakdown ?

There are income tax implications of both..

I do a procedure every year at tax preparation time. 

Affordability is no more that $4500 per month  morthage/taxes insurance. 

What if they build just outside the city limits, so they are not paying city taxes?     

So you have LP who makes investment then when it does not go right has no clue what to do @Chris Seveney then points out not only did they get wiped out but if there is significant cost seg taken there will be some pretty hefty tax due and the LP did not know if there was a cost seg or not..

Do they include energy tax benefits within their study?

Also the school districts have been increasing property taxes in A LOT of investment properties thus eating some of our profits. 

However, it must not have been your or their intention to avoid tax.