The penalty is the irs considering the entire retirement account bei withdrawn and taxable if they disagree with you.

If you proceed without any adjustments, the following will be true: - 50% of your potential depreciation recapture will be recognized immediately and become taxable in the year of sale

But form that date on the ”taxable values” lost any relationship to market value and impossible to contest.  

Are these proceeds (fees and interest payments) taxable? 

So we have a networth so far of:104k - 15k = 89kBut, we depreciated the property for 2 years at 3.7k/yr total 7.4K taxable amount  which we would owe about 1.8k at 25% tax rate (I might be off a bit here and there)Final total net worth from what we thought it was 120k now is 87.1k which is a big difference!

You have to have the personal protection either way, at which point the LLC is less important.An accountant once warned me to be careful about using the LLC to manage the properties if they are not owned by the LLC because it could potentially trigger taxable events. 

In addition to that, I am also concerned as to how big of a loan I can get, as travelers taxable income is significantly less than what they are actually making with stipends.

If it’s the taxable gain you are concerned about, you can temporarily defer that portion of the sale through 2026 by investing in a Qualified Opportunity Zone fund.  

Now it is about working on exit strategies, managing taxable events and making full use of built up tax credits.The beginning is the hardest time especially when you work through the learning experiences. 

I am trying to understand the full taxable options.