For what I understand after the property gets sold the not taxable money will have to return to the 401(K) account.

The taxable value is much lower than the assessed value and was wondering if doing a subject-to will force the taxes up to the assessed value.

What would the taxable amount be?

If you strategically plan your rental's between appreciation plays and cash flow plays you can sometimes create enough depreciation loss to offset most of your taxable income while still receiving cash flow from a month to month perspective.If you have 100,000 annually in rental income or 8333 a month in gross rental income you can find a property(s) that still cash flow albeit a lot less that net -8333 a month with depreciation factored in to end up with a $0 tax liability scenario (no tax advice, consult a tax advisor).There are pros and con's at the end of the day to each since rental's arent stress free either =/ so I would always default to have a balance of different products in your portfolio depending on your goals.

Do you have currently tax free appreciation that will become taxable?

Short answer: Your LLC is a pass through entity and distributions won't impact your taxable income.

My online business doesn't count because it hasn't been a full year and there's no taxable income until next year. 

Both allow for the grossing up of non taxable income to qualify ( like Social Security Income ) VA uses 115% and FHA is some cases will use 125% ( for now )

Is the money you pull out of the property taxable as income?

If you do two things you will not have a taxable event.1.