This defers taxation on the sale, which means their capital keeps working without giving away earnings to the IRS. 

Thanks    KenHere's the link to rates by county and town:   http://www.state.nj.us/treasury/taxation/lpt/taxra...

Account Closed I realize that works out great for you, but your comparing "apples to oranges" in terms of markets and the effects of taxation on investors. 

Originally posted by @Jon Lanclos:This post makes me sick - this is how far entrenched the government is in our lives - how many exclusions and adjustments and qualifications are talked about in all this great advice - we need tax reform in this country There is only one exclusion being discussed -- when you sell a personal residence, some or all of your gains can be shielded from taxation based on the amount of time lived in the property and the size of the gains.This is one of the most beneficial tax break in the entire code...we certainly don't want to see it go away.

Zillow has property tax at $1005 per month. 

You should discuss with a CPA who understands pass through taxes, real estate taxation, and can provide you with recurring tax planning services.

If you don't have one already, you can get a Self Directed IRA (SDIRA) and even invest in REI from within that account, so that may be an option to look into if you need to shelter some income from taxation but want to put it into real estate.

Do you mean partnership for taxation purposes or just that he would be your "partner" in the business as opposed to just a lender? 

It is an absolute disaster of a state financially, and you have been, and will continue to see new forms of taxation and existing taxes go up.

Therefore 80% of the income received by your IRA is looked at as Unrelated Debt Financed Income or UDFI subject to taxation.