It is the additional power to completely defer (indefinitely and later eliminate) the remaining Fed cap gains tax and associated state tax as well. 

Most people overlook net returns (post tax), as opposed to focusing on gross returns.

In other words there won't be profit to tax, as far as the IRS is concerned.If that $400-500k is actual profit for you, then I don't see how you don't 1031 it into other property. 

Especially if you're dealing with a heavy California income tax as well.That being said, I think the positives are enough to outweigh that most of the time.

Have you owned the home as a rental long enough for you to know the property tax as a rental not an owner occupied property?

@Steven TorokFirst you want to determine if you are having to pay additional tax as a result of your rentals.

You must (and should) depreciate investment property whether or not you are actually able to take advantage of the deduction for income tax purposes because you will be subject to depreciation recapture tax as part of the gain calculation whether you took a deduction for depreciation or not. 

@Dave CieslickiIt shouldn't matter but I don't wanna buy a property and then not be able to resale it and get stuck with the property tax as well.

Thus, I pay income tax, as well as self employment tax on my gains.

Your tax, as long as you've owned it one year will be 15%.