You and your husband are in a great position, either way, it's a great financial upside.I'd suggest reaching out to your CPA about what your tax liability would be if you sold.

Also, if you have a slip and fall and decide to sue your LLC, you have added liability protection.

Have you looked into the comprehensive and liability insurance for that type of property/business? 

Due to the location (southern LA) the only property insurance I could obtain is through the state's FAIR plan, which does not include liability.

Your primary insurance policy with $300,000 in liability coverage should be sufficient in 99.999% of all lawsuits.5.

Any reduction in debt or cash received might be treated as "taxable boot," potentially resulting in tax liabilities.

One question is liability and insurance, also what if the 'adults' (ie couple on the lease) leave and all that remain are the students? 

The best option for you depends on a number of factors including your exit strategy, any liability concerns and preferred tax treatment.Type of EntityTax TreatmentMain AdvantagesC-CorporationDouble TaxationCorporate tax rates are lowerS-CorporationPass-throughSelf-employment tax savingsLimited Liability Company (LLC)Pass-throughLiability protection and flexibilityFuture Outlook and Recent Tax Law ChangesMost recent tax changes applicable to real estate investors include:The increase in the estate tax exemption to $13.61 million per individual for 2024.

Transitioning to newer product is a great step in rebalancing the portfolio and reducing liability on cap ex issues.

See what your tax liability is on the money and what you should set away for Uncle Sam.