How can I avoid capital gains tax if at all?

There should also be records with the city of the guest house being built (if not, easy enough to report it to the city) and copies of his tax returns.

Then each propertyOwner along the road will get assessed on their property taxes.  

He really needs to clarify goals, get with a good tax planner etc. 

This includes 1 off-street parking spot - which is very desirable in South Beach) HOA is $802 and taxes (with no exemptions) are $3192.

Best to seek counsel from your attorney and tax professional but if you are going to insist on saving a few dollars, best to provide more specifics on the type of partnership you are contemplating so you can get your hands on something that's remotely relevant. 

However I only have 1 year of tax returns.

With the BRRRR strategy, you can "force" the appreciation and get the benefit of both.Please feel free to connect with me if you have any other questions, and if you need any assistance or guidance with bookkeeping, taxes, or other business strategies please let me know.

So I would be paying it back with after tax dollars to only pay tax on them again when I retire.

No personal income or tax returns needed.