Exactly it - it is that process of moving the property from a corporation to a pass through entity that will trigger that gain, and it is NOT the conversion of that entity for state law purposes to an LLC that triggers the gain.While you might think of this wholly owned S-Corp as "just you", for tax purposes it is entirely separate from you.   

The early days padsplits operations process tried to run uusing hotel tenancy laws, that has fallen by the wayside due to magistrate court/fitting into a standard eviction process via magistrate court. 

Luckily, I’ve spoken with him on multiple occasions and he knows real estate and the underwriting process.

Have you had any success in finding good deals yet?

I'm just going through this process with Lower.com.

-Ant Ant,Really appreciate this response and it gives me confidence that my thought process isn't off. 

I  took this information and added it to our purchase process considerations.

With that kind of real estate in your pocket you are certainly wildly successful and a very savvy and intelligent person. 

Analogize to how a federal law can lay out a process for protecting or enforcing a Constitutional right but can't change the right.  

If all they need to do is walk in, fill out a form and walk out 10 minutes later with a permit in hand, then I wouldn't pay much more than the cost of the actual permit; if it's a process where they need to spend several hours waiting at the permit department, negotiating with inspectors, etc., then that's more time investment that you should be helping cover.