I’d fix it up and list it to sell after I’d been there two years to take the gain tax free.

Like your post title suggests, you die to avoid the taxes.

In addition due to prop 13, the tax base is a fraction of if it sold today.   

My duplex - built 1989, 2,060 sf, 2 bed/bath, 1 year old roof, value if I subdivide (county already approved) and sell each separately $150k each ($300k total)Investor duplex - built 1995, 2,300 sf, 2 bed/bath, 5 year old roof, value around $310kThe investors initial request was for an equal trade and they would pay realtor fees, which I replied wouldn't be equal due to buying/selling costs (recording fees, title insurance, closing fee, survey, inspections, loan fees, 1031 fees, accountant fees, repairs), taxes would increase due to new sale price, I'd trade a 3.75% mortgage for a higher one, and I'm on the 10th year of a 30 year loan so resetting that to a new loan would restart amortization and pay more towards interest.

When you file your taxes at the end of the year the accountant is going to ask you for your receipts or what and how much you want to write off using deductions.

Instead of evicting them, i was thinking is there some way that I could rent it back to him for very cheap (mainly to cover just the taxes/ insurance) ie 2k a year rather than the going rate of 2k a month for similar properties.

I'm starting out doing redeemable tax deeds and going to auctions where everybody has "bigger pockets" than I do.

Not to mention the tax benefits it allows. 

Getting title and getting clean title for properties bought at tax auctions are two different things. 

.: The applicant needs a social security number or an individual tax ID number (ITIN).