You could choose to take the property out of the plan as a taxable distribution in-kind, but the tax hit of doing so will be huge, and there would be no benefit to using the IRA or 401k in this manner.

I have a few friends who do non deductible IRAs but don't quite grasp the minimal benefit over a taxable brokerage account and the added complexity of tax accounting IMO.All that said, I'm not a financial advisor or tax accountant, just what I've learned from reading and my own tax planning.

yes all that income is taxable, but there is also a ton of expenses, and all that is tax-deductible.

If you take possession of the funds improperly, it will be a taxable event. 

However the home isnt in market condition and needs a lot of minor repairs. i had some estimates run on the property and the numbers came to about 20k in repairs before it is in market condition.corner lot.house is on .25 acres and 1900 sqft total.2/1 1100 sqft unit 850 rent (rentometer)1/1 800 sqft unit 650 rent (rento) metertotal potential rent 1500/moalso has 2 car detatched garage.976$ taxes86$/mo insuranceIm struggling trying to determin how much i should offer considering its "family" ive been told that I would be able to purchase the property for 73k (taxable) value..

In looking at my states registration form, I see a "corporate income tax" "all" have to pay if they make income here, 4% of taxable income and a surtax of 3% taxable income above above $50 gees.

Your debt to income ratios will be way out of whack before you know it.I also don't think they should treat a 15 year mortgage like a 30 and take 25% off of both as if they are the same situation.Don't forget to tell them to add back into your taxable income your depreciation.

Cash and/or debt can be received as taxable "boot".

The income might make her social security benefits taxable.

Now that I am sitting on a ton of real estate, I paid cash for my MBA, and max out my 401K in the first month of the year purely to reduce my taxable income, which nets me more return (between gains in market, employer contribution and tax benefits) than the cash on cash return from rents one just one house, not counting appreciation, and I'm not all in ONE asset class.