., greater gain on sale due to a lower tax basis) if/when I sell each property. http://finance.zacks.com/insurance-claims-taxable-...Property Damage ClaimsIf you receive insurance money for damage to your car, the IRS does not consider that taxable income.

If your dad gets the loan in his name and then quit claims the house over to you, that quite possibly would be considered a taxable event.I do not believe your statement that parents can give their kids stuff with no tax hit. 

Your property is now an investment property and its sale is a taxable event. 

This will possibly give you a larger passive loss to reduce your taxable W2 income.

The taxable income is:total collected income (rent, mostly, but might include utilities, late fees, etc)lesstotal expenses (taxes, insurance, repairs, mortgage interest (only, not principal), legal fees, utilities, etc.)and less depreciation (based on the value of the improvements when you original bought the house plus money you spent getting the place ready to rent, and also capitalized items like roofs, flooring, etc.)You pay the tax on this amount, if its positive.  

Doing so will reduce your taxable income and you can invest the $$ you would have otherwise given the government.

http://www.amortization-calc.com/ At 5.5% and a 30 year term, your monthly PI is $2,172At 7%, your monthly PI is $2,545Both are very manageable on gross rents of $625 x 8 = $5000As far as a balloon, if he doesn't want a big taxable event NOW, he isn't going to want one in a few years either. 

A decision to accelerate an expense or to defer an item of income to reduce taxable income for regular tax purposes may not save taxes if the taxpayer is subject to the AMTCapital Gain planning:Since short-term capital gains are taxed at the ordinary rate.

So, with relatively static assets such as property or notes, any value near the end of the year will get the job done.For investors where the account value drives a taxable process, such as those subject to required minimum distributions or when a Roth conversion is taking place, then a more precise and arguably time-sensitive valuation is required.  

That would normally allow me to offset some of my net taxable income from other properties and any income from jobs (IT Programming jobs, that is) that I may do on a 1099 or W2, up to $25k of taxable losses.The reason why I need the purchase for the offset is because rents keep going up, creating a taxable obligation.