According to the Taxpayer Relief Act of 1997, there are 250k or 500k capital gain tax exemptions based on marital status.If it's considered as an investment property, then I'll need to prepare to do a 1031 exchange.

@Emily Happick, The tax payer has to be the same between sale and purchase in a 1031 exchange. 

At what point has the taxpayer had enough time to redeem and the investor is allowed to continue with its improvements?"

At what point has the taxpayer had enough time to redeem and the investor is allowed to continue with its improvements?"

If they don't match, it just appears as though you are temporarily visiting.Also be aware that states that lost tax payers, such as CA, are going to extreme measures to make sure that people are paying taxes.

The taxpayer can redeem at any time for the first three years, and can still redeem at any time afterwards up until the investor files a judicial foreclosure lawsuit and the judge grants the judicial foreclosure order. 

Yes, you are correct, a Cost Segregation does not help all taxpayers.

I pay state income tax in CO on the rental income and state tax in CA for my W2 job.However, I sold some stock (which was held for years) in 2019 and noticed a slight increase in my CO state income tax.Then in 2020 I sold substantially more stock and my CO state income tax payment doubled.

Any subsequent expenditure of funds to pay for repairs is treated as though the taxpayer received cash and paid for the repairs after completion of the purchase.

Meaning a person can be both dealer and investor.To determine if the taxpayer is a dealer three questions must be answered:(a) What is the taxpayer's trade or business?