So the bottom line is when people have shown they make bad decisions, the government needs to step in and make their decisions for them.As far as the other red tape associated with Section 8, that is to protect tenants and tax payer money from dishonest landlords.

- Should I put those expenses under repairs or do I need to use bonus depreciation or De Minimis Safe Harbor or Small Taxpayer safe harbor?

The positives are your capital gains tax payment is deferred until 2026 and any gains you achieve through a QOZ investment appreciate tax free after holding the investment for 10 years.

Any tax paying entity can do a 1031 exchange. 

@Callie Edward Muckelroy, if you and your wife file a joint tax return you're already both the taxpayer for the old property. 

We have some capital gains this year and read about opportunity zones and how they can partially and permanently remove tax payments on capital gains depending on how long you hold the investment.

And you've got to take title as the same taxpayer that sold the old property.

Obviously people are still building and renting buildings despite the fact that Prop 13 creates vastly different property tax rates depending on how long the current taxpayer has owned the building.The biggest beneficiaries of Prop 13 aren't tiny landlords, they are large corporations like Disney.But more to the point, if landlords thought that price stability for small business was their concern then they would support rent control for tenants and not for owners.

@Troy Danno If you and your wife live in a CA, which is a community property state, together you may be considered the same tax paying entity.

The story you hear about California is true for California residents, but not true for the taxpayer that lives in another state but invests in CA.