At least ensure you are getting proper tax advice.C corp and s corp are both US federal tax concepts, not business entities.

Quote from @Ashish Acharya: @Cameron Marmon Since you’re married and living in Texas, a community property state, you have the option to treat your 50/50 LLC as a disregarded entity for federal taxes.

Here’s how the ATI exemption process typically works:Trigger Event: An Assessable Transfer of Interest occurs when a property is sold, inherited, or otherwise changes ownership.Reassessment: Following the transfer, the county reassesses the property’s value, which could result in a higher tax bill.Application for Exemption: The new property owner can apply for the ATI exemption to reduce the taxable value of the property.

Thoughts on ways to optimize this for federal tax purposes?  

Under the assignment of income doctrine, income is taxable to the person who earns it, even if it is directed to someone else.

At some point your business partner will want his cut (Federal Gov).

Income taxes- ask if your  insurance claim not taxable income.  

A few things to note-Loan payoff isn't part of the calculation of what taxable gain will be. 

They lower taxable income for federal taxes but not for FICA.However, employer contributions made by the S-Corp are not subject to FICA and count as a business expense.Make sure your W-2 correctly reports wages, deferrals, and FICA wages.

The IRS won’t allow this as a legitimate deduction.No Tax Benefit from Self-RentEven if you set it up through an S-Corp (which is more complicated), the rent payments you make would be taxable income to the S-Corp.