In non-community property states a husband/wife LLC is supposed to be treated as a partnership  And transferring from a revocable trust (reported on your 1031) to a partnership LLC (that files it's own tax return) is changing the tax payer. 

It is tax free in the sense that you will not owe taxes today on the cash-out.

This is a screenshot from a private Facebook group for tax professionals.

It has cost many people including myself a lot of unnecessary money and still is because you deal with the tax portion of opening unnecessary LLCs recommended by supposed professionals. 

Tax Breaks- I am not an accountant, but I recommend conversing with one to see all of the benefits to owning a rental property.

Are there any Depreciation recapture or capital gain Tax dispositions that need to be resolved with the exiting member?

I set up tax lien as a keyword alert so I get alerted when someone mentions them.

Avoid basing it on uncontrollable factors like taxes or insurance.

Just a heads up this will not be tax free, it will be a pro-rated exclusion.

Almost every action taken in the economy is taxed and the faster the economy chugs forward the more taxes they collect.