STR seems to have better tax benefits (in the right market) but is it worth it at a distance ???

So all of the gain and depreciation recapture are initially still tax deferred.However, like Joe said, the down side is later when sold  you lose the 1031 option. the client will pay tax on all gain and depreciation recaptured from before the 1031 also. 

(One went with another manager eventually, and the property is listed for $400/month less than we listed it, and the other finally got rented to a solo professional.)

Remember you are exempt from excise franchise tax if you file an exempt form.This post does not create a CPA-Client relationship.

When I did my first house hack in Columbus I showed very low income on taxes. 

Keeping clean records from day one really helps when tax season rolls around.

It’s definitely smart to evaluate the tax and cost implications of your funding options.

And of course we're in agreement on consulting a tax pro.

Now I can see some builders having an issue with comps.. but other than that its crazy to take these funds as income and then pay tax and plow it right back in.. 

The US Government and the States have but one way to deal with this, taxes.