Because after purchasing the new rental for $700K that leaves them $300K initially, so take $260K to pay off their mortgage, and still enough left to cover a good chunk of the taxes owed. 

Quote from @Melissa Stanley: I’m hoping to purchase a few properties with a friend/business partner but after meeting with a lawyer am even more confused.

Now he needs to participate in the payout to investors who lost money when the properties they bought through GEG were never renovated, even after they paid for those renovations.I will be contacting the SEC and FTC so they can take care of it.

However, there is no specific holding period contained in the tax code or regulations and there is no "safe harbor." 

This is after covering all expenses and setting aside a certain amount for reserves to cover future expenses like capex or vacancy. 

You will be taxed on way more than $150k, and also this $150k number is totally irrelevant for the tax calculation anyway.

Also, I am thinking of investing into real estate via a new Self Directed Roth Solo 401K account due to tax free distributions after age 59 1/2 instead of SEP IRA, any thoughts? 

Selling the PropertyIf your parents decide to sell, they could: Sell As-Is: At a current appraisal of $350k, they could walk away with a sizable profit (after transaction costs like realtor fees, taxes, etc.).

So, when Trump changes to no tax on tips I feel inclined to change my rental income structure.50% reduction in rent.Previous 50% made up from a mandatory nontaxable tip. 

It’s definitely smart to evaluate the tax and cost implications of your funding options.