She didnt, and two weeks after going under contract, we got a credit-monitoring notification that this mortgage had gone delinquent.

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

Intangible assets like goodwill or tangible personal property (e.g., equipment) are excluded from 1031 treatment and are taxed separately—goodwill is typically taxed as a capital gain, while equipment may be subject to depreciation recapture taxed as ordinary income.To minimize taxes on the sale of the business, consider strategies such as Opportunity Zone investments, which defer gains until 2026 if proceeds are reinvested in a Qualified Opportunity Fund (QOF), or structuring the sale as an installment agreement to spread taxable income over multiple years.

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

What paperwork should I keep a paper trail of to make things like taxes and other situations better/easier for myself?

I would also share pros and cons of paying taxes on the windfall versus owner carry.

I keep scans or pictures of all of all letters I send this way including the letter as readable before it goes into the envelope which includes the tracking number written on the letter, plus the filled out certified mail paper and the envelop after its addressed. 

Hi Steve, where did you get your property tax estimate from?

I'd be happy to make connections over similar goals, and to learn about tax info for DC, great spots to buy, and trends for rentals.

Agreed - plus two additional thoughts:1) I always recommend having your CPA also review the drafted operating agreement for the tax issues.