This is due to bonus depreciation which allows taxpayers to deduct 40% of qualifying property costs in the first year, in addition to regular depreciation for new construction and improvement.

So if I’m understanding correctly, if you sell your home within 2yr of purchase, you don’t have to pay capital gains taxes? 

Is an IRA subject to capital gains tax?

You don’t get to just expense the additional real expenses.

I am also a huge fan of real estate and for the past 50 years there's been a way to combine both.By leveraging a Self-Directed IRA, real estate investors enjoy both the traditional advantages of property ownership and the additional tax benefits of retirement accounts, creating a powerful wealth-building strategy.

The opportunity cost of losing potential market gains in your retirement fund should also be considered.

Build equity while gaining experience as landlords.

I was interested in something like owning a rental property as a way to generate some additional income. 

Did the proceeds from the sale count as short term or long term capital gains?

I am obviously conflicted with the moral side of pursuing legal action here, but understand that people can do untruthful things when it comes to financial gains.