If you own a property in an IRA, the income is exempt from UBIT.  

You get to claim an exemption on your Federal tax return for that.  

If you sell it after it's been a rental for 3 years you'll lose the section 121 exemption.

@ - Alan Mackenthun , the taxes would be exempt in a ROTH IRA though because you pay taxes on the contributions before they go in.

Does the fed estate tax start at 5 million for exemption per married person?

I checked into that about $600 for $100K home, but I should value it correctly read my policy and understand exemptions.

As far as I know, you have to have lived in the property "two of the last 5 years, period" to receive the full exemption.

Mostly quaint shops, medical and office buildings down "main street".Here's what I know now after a few days of phone calls and research....Only 8 units (the 9th one is gone -- fire, explosion, etc...)Price now $400K (better because one less unit, but still $50k per unit)Only one tenant is salvageable and I don't know the details of the rent yet (all the remaining tenants are being relocated by seller prior to possession -- this one lease is up in April)Property is owned by a non profit and is used for housing for people needing a little help (so no income to speak of)No expenses to speak of (at least for current owner because they are tax exempt and volunteers provide services for repairs when needed)Electric is not divided (don't know total yet but I would spend the money to separate and have tenants pay)Property was built in the 50's and remodeled in the 90s (I still haven't seen the inside of the units, but are housing mostly elderly couples that have been there for at least 10 years -- agent says I will be pleasantly surprised -- walking through on Tuesday with my general contractor friend)Advertised total square footage was pulled from tax records stating about 10,500 sq. ft for living space (so around 1300 per unit...

What can come into play are homestead exemption rights, as to amounts, but raw land may have homestead rights as well, there will be variations state to state.

Non-profits are exempt from origination requirements under current regulations.