My guess would be that as this GP is doing 1031 as a TIC into the deal he would be a little less likely to want a sale, which is a taxable capital event, and would like to keep his money invested and sheltered from taxation as long as possible which tends to fit with my investing style of long term/preferably forever investing.        

. - so to summarize: 15% federal capital gains tax, 8.97% NJ state tax, 1% realty transfer tax, depreciation recapture and whatever other costs for closing.https://www.nj.gov/treasury/taxation/documents/pdf/guides/Bu...

New set of taxation laws to understand.4.  

Thumbs up for having good understanding of taxation to get suspicious.

If yes, does this affect taxation of distributions?

The LLC has no impact on the effective tax rates.Also if you acquire a property for the purpose of flipping, that will always be Ordinary Income, also likely subject to self-employment taxes.That particular sales event has no impact on the taxation of your normal rental income from other properties. 

Best,Jon Property tax at 1.1% on $1.3m purchase and $250k ADU is $1420. $2,200 for 6 units will likely not even cover maintenance/cap ex but we will say it does.  7% PM is $770.  5% vacancy is $550.  

My questions are around taxation - i have read that if the rental is not associated with a us trade or business, then the gross income from the rental is taxed at 30%, however if associated with a us trade or business, then graduated rates apply, as well as the net is taxed and not the gross.

Its a lifelong learning experience (and Im saying that with a Masters Degree in Taxation and 12 years experience as a CPA haha).

@Matthew Crane  Do you have a CPA that specializes in real estate taxation?