The 1031 exchange rule to defer your tax is two part 1) reinvest all your proceeds and 2) purchase a property (or properties / DSTs/TICs) with an equal or greater market value.  

And you now have to file three tax returns:- partnership tax return- your individual tax return reporting 1/2 of the partnership losses- your partner's individual tax return reporting their 1/2 of the partnership lossesAnd while partnership return can be DIY-ed, it probably should not be.

Maybe that is why the old owner didn't pay their taxes?

& how you become financially free is by letting whoever your renting to (I'm guessing that was a step also?)

They can sell tax free.

Hi All, any input on renovating a house and possible tax exemptions under an LLC?

Focus on tax-saving strategies such as cost segregation studies and bonus depreciation to accelerate deductions.By qualifying as a Real Estate Professional (spending 750+ hours annually and materially participating), you can offset your wife’s S-Corp income with real estate losses, reducing your tax liability.

And she’s the one that released the latest tax rates and year to year comparisons in September of 2024.

Use that loan to pay the back taxes and get things under control.

You can use it as a downpayment on a property over $450k and use leverage tax free.