Several of my recent buyers have been medical and legal professionals with high taxable income, that are looking to expand their value portfolios by incorporating an accessible short term rental property (often doubled as a legacy anchor) that will often offset or 'pay for itself,' in tax savings. 

I want to take out what is not taxable gain only. are you saying you lose the 250k exclusion on the 1031 because that 1031 may not stay as an investment property forever to make it sold. 

For instance, if the cash value exceeds the total premiums paid, the excess amount is taxable as ordinary income.Risk of Policy Lapse: If the policyholder cannot maintain premium payments, the policy can lapse, resulting in the loss of the death benefit and potential tax liabilities on the cash value.

I paid $600 for a cost seg that will take $60K (80%*75K) off of my taxable income for 2023.

In general though, you're able to directly offset your income from the active rental activity with the *losses* you take from the business, but once the business becomes profitable, this would also add to your taxable income. 

It is actually assessed (taxable value) that seems to be the closest indicator to the selling price.

You will likely have taxable income and an increased tax bill in scenario 2. 

@Kim LeJeuneI have to assume that it was a rental house, as opposed to your personal residence or a flip.Each monthly payment has 3 components: interest - taxable as ordinary incomereturn of your principal - not taxablecapital gain - taxable at various ratesYour down payment has components #2 and #3.Interest should come from an amortization table. 

My quick research indicates that while there is legal precedent (albeit from 2000) that this would be technically treated as a sale, only the principal and interest paid via seller financing amortization schedule would be taxable.

This is where you report negative income amounts, including NOLs.Calculate the NOL Deduction: The NOL deduction allows you to carry the loss forward to future tax years to offset taxable income.