A homestead usually helps with lowering taxable value, but it's kind of screwing me over in this situation.

However, I think from a financial perspective, it's likely a better idea to pay off the debt or add the money either to a taxable brokerage account or a retirement vehicle like an IRA.

That’s a complicated set of questions but it insures you get past every reason it would be taxable.

Retirement distributions are considered taxable income(Federal and state).You mentioned self-managing the rental properties so it may be that the income will offset against the rental loss.However, you will still be subject to the 10% penalty.Have a conversation with your CPA and ask them to draw you up a draft of several different situations and see if that is something you want to move forward with.

Pay no taxes as its a non-taxable event.2.

Oh got it, thanks for the explanation.I am not an accountant or attorney but from a  law point of view I believe that as long as the equity is bound in the property it is not realized capital gains so it won’t be taxed.You could structure it as a deferred payment due at some point in the future making it taxable at that point.

You should know the rules inside out or be working with the professionals that know it.Incorrect moves can result in not only a taxable event to you but to your investors.Based on your most recent response, i do not think you have a good understanding of1) requirements of the QOF(You may need to substantially improve a property)2) How long you need to hold a property before it can be sold to exclude the gain3) Inside basis vs outside basisBest of luck

So, selling price of $645,000 minus purchase price $415,000 minus new kitchen $50,000 is taxable about $180,000 at 28% tax is $50,000 tax to IRS.

The rental property itself provides the tax benefits and not necessarily the entity structure.Depreciation should wipe out your cash-flow from being taxed, especially given the high prices of properties right now.You should have your tax returns reviewed if your properties are reporting positive taxable income.

Since I am retired and have been able to par my normal taxable annual income down to a bare minimum it might be possible to use a small portion of the capital gains in future tax years at Zero tax rate or at least at a very desirable low rate.