Tax-free gains, compounded over the long-term, are HUGE.I'll take that over whatever (potentially taxable) returns I could enjoy on $5,500 per year in the short-term.But to that point, if $5,500 a year is going to make or break an investor's ability to execute their investment plan in the short term, then they should probably be looking for ways to maximize their income rather than figuring out how to maximize their return on $5,500 a year in the short-term.And you can self-direct a Roth mind you.Mine has been invested in stocks (during the Recession), then notes earning 12%, and now a beachfront project in Orange County, California.The ability to snowball TAX-FREE WEALTH in such a vehicle is a significant financial boon.

Your net taxable income is $68,000. 

Even though our money, for the most part is in taxable brokerage accounts, reaching out to lenders for rental property loans...they mostly have looked at our W2 income on the past 2 years.

I do recognize that I have tax exposure on a $20k taxable boot as the purchase was $20k less than the sale.Thoughts?

In this case, there is no taxable event since there was no sale. 

If you put RE into your retirement account and THEN change your mind, I believe taking it out would constitute a distribution (taxable).

These are taxable accounts, but I've been able to offset the gains with deductions somewhat related to my RE investments, so I'm OK with that.I left what I had in my 401K account, and with my 'dabble' brokerage accounts I do keep a certain exposure to the market.

The payment itself can be issued from the LLC account and does not need to be routed and processed through your account with IRA Services Trust Co.Straightline depreciation on the property is applied as a deduction against the taxable income, as would be other normal expenses such as real estate taxes, insurance, etc.  

Its taxable value is $325,000.

Do you like having more vacancy as that reduces the taxable basis to start?