A cost seg study would help you accelerate your depreciation, reducing taxable income.

Hello All:I am trying to purchase a 4-plex using seller financing and the Seller's accountant is telling the Seller that they need to receive enough of a down payment to cover the depreciation recapture which is taxable in the year of the sale. 

So what a lot of the owners did was demolish the houses to reduce the taxable value.

Also, appreciation is taxable in exit opportunities if you distribute it to the shareholders.However, flips can be beneficial if done inside of an S-Corp.

Depreciation and amortization are added back as they aren’t real expenses out of your pocket, just accounting expenses to reduce taxable income.

If your transaction fails to provide for interest at a minimum rate specified by the Code or by IRS, then the part of the payments received by the seller is treated as interest (“unstated interest”) that's taxable to the seller despite any contrary intention your and the seller. 

So you have to prorate your gain between taxable and non taxable gain.There’s is no non qualified use if you buy a house, live in it for 2 years, and rent it out for 3 years, in that order. 

You might want to think about doing a cash out refi instead of selling as that is a non taxable event. 

Until recently, if the value of a borrowers house declined and their bank/lender forgave a portion of their mortgage (via a short sale or deed in lieu), the tax code treated that amount forgiven as ordinary taxable income.

John Briggs,I don't know your tax bracket but lets pretend you are single and your highest taxable dollar is: 85,650 which is taxed at 25%.