now you only have $18k that is taxable. if you invest in other deals along the way, even this $18k will be wiped out by other paper losses.At least for now until tax code changes, if you die then your children will inherit these investments at stepped-up basis, all deferred taxable gain being wiped out.

That would not be taxable.

@Juan Abreu you’re playing with fire for owner occupied properties for use with rentals because if you apply for the homestead discount (reduction in taxable value of your home) for Ooc homes loans look for that sort of thing and can deny you based on that.

So, if you sell for $120K, pay $12K in various closing costs, and spent $75K total for the purchase, rehab and buying costs, then you have a taxable gain of $33K.

From here I have another question comes out:If the non-resident Foriegner buy the rental property, does the rental income taxable?

I'm not an attorney but I believe in an older similar thread it was determined that you can't create a taxable situation for yourself or something along those lines.

(For example, the easiest method I can think of, is it acceptable that one of the partners write a check which is commingled with the funds in the other  partners checking account, or would that count as taxable income for the receiving partner, or entail other pitfalls.)Any input is appreciated. 

UBTI - Unrelated business taxable income2.

When you do so, the amount distributed is taxable, but the 10% penalty for early distribution prior to age 59 1/2 is waived.

Sounds to me like he either had a really bad year with repairs; however, I also think he might adding in a few extras to bring taxable income down.