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

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.

You got the lower down because the property is owner-occupied.

Would that lower our tax liability from other income we receive or no because this is purely RE and not an operating business?

You have $200k in equity but you’ll have a taxable LOSS after selling for $1M or even $1.05M. 

You lowered the amount you had/have to buy with your exchange.

So often rentals don't have taxable income; and once they do it's still not subject to the payroll taxes paid by W2 wages or on self employed income. 

If you don't rebuild or replace, the transaction is taxable. 

However, due to Shrewsbury’s lower tax rate (12.04), its annual tax burden is only $161,000, significantly less than its Worcester counterpart.Economic ConsiderationsThe disparity in tax rates between Worcester and neighboring Shrewsbury illustrates a financial challenge for supermarket operators.

That rate will be lowered further to 40% in 2025, and 20% in 2026.