But we shouldn't be at all surprised by the clever language that doesn't make this obvious to those who read these things with a superficial gloss which is precisely what the drafters are counting on.Bottom line, the cure for rampant overspending is less spending not more additional layers of oppressive taxation.

I would prioritize finding an accountant who specializes in real estate taxation over one that is local.There are 20+ accountants on this message board who specialize in real estate taxation.

If so, there are accountants on this site that specialize in real estate taxation. 

@Rob NewsomInvesting in a state with an income tax may require you to file a non-resident state tax return with that state.States normally try to avoid double state taxation by providing a credit for taxes paid to other states.I would say - look to invest where the numbers make sense based on your critera even if that means looking in a state with an income tax.There are 7 states without an income tax - with your logic, you are missing out on investing in 85% of the united states.

@Daniel DietzYes, you would be able to pay back the distribution and avoid taxation. 

The element of net cash flow sheltered by tax depreciation can be typically reinvested without immediate taxation, the remainder typically cannot.

As an employer sponsored plan, it has some advantages over an IRA based structure in terms of contribution limits, capacity for tax-deferred and Roth money, and an exemption from taxation on leveraged real estate investments. 

So it must be taxation.

Geoffrey,I recommend finding an accountant who specializes in real estate taxation over one that is local. 

Matt,I recommend finding an accountant who specializes in real estate taxation over one that is local.