Doing so can make it a taxable event if you ever have to financing the property.Do NOT put into your family trust.

The sale will be a taxable transaction, but you'll be able to use the $250/500k exclusion.

The retirement funds can be used without taxes or penalties in this fashion, but the C-Corp will operate in the normal taxable realm.To invest in someone else's business, you could use a self-directed IRA. 

Also note, you need 6 months of cash reserves per property.I think your biggest hurdle is the documented income.My experience has been that most companies want to see 2 years of taxable income.

Example:$200,000 duplex renting for $2200/month=$26400 annual income$50,000 down5% interest - $9660 debt service, $7440 is interest$9000 deductible expenses (R&M, CapX, Management, Taxes)$160,000 Value of Improvements / 27.5 years = $5820 depreciation per yearSo my taxable income from this property is:Taxable income = Gross income - deductible expenses - interest expense - depreciation$26,400 - $9000 - $7440 - $5820 = $4140 taxable incomeIf I'm in a 32% tax bracket (state and federal) I will pay $1325 in additional taxes.

It means that you have no taxable rental income, and your taxes do not increase.

I now understand the value of a margin of safety (have much more investment income than you need because it's always easier to do something with excess income than it is to make up a shortfall of income).Question: If you spend time on a hobby you really enjoy doing and the hobby happens to bring in more money than you spend on it (taxable income), is it still a hobby?

Our goal is retire in 10 years while the kids are still at home living on REI cash flow; saving our 401ks, pensions and taxable accounts for later years.

Because you don't meet the requirements for a primary residence sale all of the gain from the sale will be taxable if you don't do a 1031 exchange.Here's where it gets sticky. 

Your cash flow will be taxed at your normal taxable rate.