A Solo 401(k) Plan would allow a much higher tax deduction - $54,000 or $60,000 - depending on age, but the source of that income must be a "trade or business" and the sale of long-term RE likely will not qualify.The 1031 enables the investor to defer capital gains recognition by "continuing" the original investment through an exchange.

I understand that it's difficult to start, because you need all of it to function: host property, guests and name recognition.

I've found that Tenants don't like to live in filth, and don't like to live in residences that have been trashed beyond recognition.... but a tenant who knows exactly when the axe is falling???

If you are looking for flexibility with your time and do not need the marketing, training, and name recognition that a brand name brokerage provides, I would recommend going with a local broker that will not demand to much of your time with floor times requirements, desk fees, training classes, etc..My broker here in Connecticut is always there when I need him for questions I have or paperwork I need him to sign, but he doesn't require any time from me if that makes sense.  

I have started using this technique and it has helped my direct mail gain recognition and also i have found motivated sellers through my skip tracing and cold calling efforts.

The businesses that are able to make it work and stay afloat are the ones that deserve recognition. 

Any sale without a subsequent 1031 will result in a recognition of gain based on the pro rata from the carry forward of the 1031.Secondly, since you are creating real estate you will need to demonstrate "intent" on each of those new pieces.  

This reports the non-recognition of gain sale of the property in the 1031 and the replacement purchases.  

Its not like we USE K5 security robots with facial recognition and drones yet! 

"[8][9]"[M]ay a taxpayer exchange real property for an interest in a Delaware statutory trust without recognition of gain or loss under § 1031 of the Internal Revenue Code?"