In the unfortunate event someone passes away and the property transfers via probate or a will, that fair market price gets "stepped up" so no taxes are paid.I would check with a CPA, but this is my understanding.

A short sale might be an option if the seller’s lender agrees to take less than what’s owed.

However, this means you’ll need to comply with the annual filing, franchise tax, and reporting requirements in both states.

My question is do I have to recapture all the depreciation for tax in 2025?

Just a heads up this will not be tax free, it will be a pro-rated exclusion.

The contributions are lower so it takes a while to build, but once you do, it's tax-free investing. 

If you do place the property in her name, you've got a Gift Tax (Form 709) to complete. 

but keep in mind CA has higher taxes and reg fees and I’m not doing more than 1-2 flips (short timeframe flips)  a year and many years do 0 flipsDo most flippers put flips into LLC Or in personal name (sole proprietor)  in CA (where you must pay $800 yearly plus accounting and other fees $300to $600+ yearly to maintain LLC) Pros for personal name-save on taxes accounting.

A good real estate accountant can save you thousands of dollars by leveraging entity selection and formation, tax deductions, cost segregations, bonus depreciation and tax planning.I recommend finding an accountant who specializes in real estate taxation, business taxation, financial planning and tax planning.You may want to consider working with your accountant remotely to expand your options.I would also recommend looking for a accountant willing to work with you throughout the year.

According to our understanding:1) California does not recognize REP status, but we could claim it on our federal taxes, is this correct ?