Basically this would allow me to take advantage of the home office deduction and several other deductions to get the taxable income down. 

As a result, I did flip financing through my IRA, just as Josh is wholeheartedly recommending that you all do.I have found out from my CPA that my IRA will be paying several hundred thousand dollars in UBTI (Unrelated Business Taxable Income) on the profits it made on the flips - taxed at corporate rates.  

They then get to deduct $6200 as their standard deduction, leaving $0 taxable income and $0 taxes paid.  

You put $20,000 into it and sell it for $100,000 in October of Year X1.Your taxable profit is $50,000.

I think the small amount of cash generated by the higher loan amount would not be enough would not trigger sufficient taxable boot to warrant the costs involved in an Improvement 1031 Exchange.Remember, there are essentially three "buckets" of closing costs on your closing/settlement statement, which include (1) routine selling and/or purchasing expenses, (2) loan payoff costs or loan origination costs, (3) and operating expenses. 

If he ends up with any cash left over it will be taxable cash boot.3) Charges on closing statements can be broken down into four categories: (i) selling/closing costs; (ii) lender/financing costs; (iii) operating items; and (iv) other.

That value would be treated as taxable income to the plan beneficiary upon distribution of title to the property.Multiple beneficiaries can complicate the inheritance of an account with a single large asset such as real property.  

Lender could bury his profits in the non-taxable account.  

Be aware too, that if you accept any deed in lieu of foreclosure, that transaction is the same as the full amount being paid and any discount is taxable income.

At that time, depreciation simply adjusted the cost basis, and when the property was sold the difference between cost basis and the net sale proceeds was the taxable capital gain.