When factoring in the cost of non-pension benefits for state workers, such as health care for retired government employees, the debt facing California taxpayers rises further.

If I am interpreting what you are asking correctly, 2 different owners (and I assume taxpayers) are selling their respective properties and the combined funds will be used to purchase another property.  

For one, any interest income a taxpayer receives is indeed taxed as ordinary income. 

If it was a property you occupied for at least two of the five years immediately before the sale closed you can shelter $250K of gains as a single taxpayer, $500K married filing jointly. 

So this really looks to be just another "for show" law that lawmaker created using (and wasting) tax payer's money...

The city is extremely aggressive about going after businesses/taxpayers in the city.  

Definitely puts a damper on the charitable billions a year, of taxpayer money, that's sent to other countries.

The Taxpayers pay for Fannie/Freddie, yet the process is a black box of secrecy. 

Account ClosedNot likely you're going to be able to free file with a Schedule E...That's meant for low income taxpayers with a W-2 and maybe a few 1099-INTs.

Do you make any mortgage or tax payments on it?