i purchased 2 fourplexes and incurred a ton of losses but project income in future. i was thinking about defaulting on 401k loan due to having enough losses to offset

If this is not your personal residence, you, in fact, might have a loss if you made any improvements to the property and if you incur any selling expenses.

Some relatives of mine have set up corporate entities for their non-trading businesses and have successfully reduced their tax burdens that way.The key issue for me is that I'm fairly sure I wouldn't qualify for trader tax status which seems to afford most of the benefits like not being subjected to the $3K max carry-forward on losses, and most importantly, the ability to claim business deductions.

You could save your self the time and effort of chasing down the tenant and trying to collect/remedy, and thereby recoup your loss and flip the burden of a suit on them. 

Moreover, you cant take section 179 deduction if you have net loss and is limited to taxable income. 

LLC's are called "pass-through entities", which means the profit (or loss) will pass through it (i.e. the LLC itself is not taxed) to you & your person tax returns. 

I have two this year: one due to a marital breakup and one due to loss of a job.

So if you sell it without the appropriate disclosures, and 6 months later the buyers find out by talking to the neighbors, and find that it was well-documented and you obviously knew about it (you even posted about it in online forums), do you think they might be angry enough to sue you for damages (to include their perceived reduction in value, physical/emotional distress, moving costs, loss of income, etc)?

Meanwhile the property is just sitting there and I'm at a loss.

At least for me, it will impact some decisions I make down the road...Assume a rental property that generates 2% of its cost in monthly rent and that operates at a 50% expense ratio (actually, expenses + rent loss + capex).