These relationships literally took decades to foster. . they are looking for the opposite so for your investors that have real taxable income and cash yes they can look at community banks.Folks that want to get into the game in my mind their first thing they should be doing is one get somewhat educated on how RE really works... and then find the money...

Still not a perfect solution however for various reasons (additional liability, creates a taxable event?

And even passive income investors, those who are investing in property for rental or ongoing income purposes, can see capital gains taxes assessed on occasion.A key factor in the tax code is how profits, which are usually taxable, can be offset with losses.

Account ClosedIf the property is your personal residence, as you indicated, capital gain up-to $250,000/$500,000 may be excluded depending on your filing status.However, since you are doing seller finance, the interest will be taxable and not eligible for exclusion.ExampleYou have a personal residence that has a basis of $100,000.You agreed to sell it for $350,000 with a note indicating that the buyer will pay 4% on balance not paid at closing.So ultimately, you are getting a 4% interest which would be taxable every year until the note is paid off.

The withdrawal will increase their income and it WILL make 85% of it taxable.

The sale of their New York investment property would trigger a taxable gain for them unless they implement some tax planning strategies such as the 1031 Exchange. 

As per their website: https://www.ipx1031.com/the-ro...Holds Exchange Funds The Exchanger is prohibited from having actual or constructive receipt of the proceeds from the sale of the Relinquished Property (exchange funds), or the ability to pledge, borrow or otherwise obtain the benefits of the exchange funds during the exchange or those proceeds will be taxable as boot.

Are there other items that should be reported such as transfer of homestead exemption in the case of Florida property, which affects the taxable value of the home?

For a business owner with $100,000 taxable annual income, the net tax savings for using an S Corporation instead of an LLC in taxes paid every year can be as high as $7,500.Holding PropertiesWhen holding properties as a cash flow investor, the LLC (or LP) is generally the better choice because an LLC has more liberal distribution rules.

If you rehab the house, rent it to tenants and refinance your money back out, you'll have no taxable event, money to repay your loan, and a long-term, cash-flowing asset.There are definitely situations where a flip makes the most sense.