This ruling holds that the selling members must report gain or loss on the sale of their LLC interests, but that to determine the purchasing member's tax treatment, the existing LLC is deemed to terminate under IRC Sec. 708(b)(1)(A). 

Might not even be a local because from their name, they don't match the local ethic demographic group. 

@Tim Johnson-- That's pretty crazy...I'm going to do everything in my power to find owners through ethical means, and if I can't, then I'll just let it go and focus on lower hanging fruit (owners who are easier to find.)Robbie J.-- That's a really useful suggestion that I wasn't aware of!

You will have two separate depreciation schedules, each on a different timeline.The key point here is that even though you have two units under the same roof, the IRS says you have two separate properties and each has its own tax treatment.

When buying/selling or wholesaling you want to make sure that you use contingencies/contracts ethically. 

@Ash Patel so you aren't surprised about potential cap gains and application of 1031 treatment, you might want to check your paperwork now versus waiting until a potential sale and being surprised.I agree with you about how the syndicate is structured could offer 1031 treatment, you may have invested as a TIC (tenants in common).  

My wife was a spender did not understand how the real estate investing would work.Fact I did not really know for sure how it would work only my work ethic and willingness to put my heart and soul in to it.We did argue big time about it some marriages may not have survived it but she stuck with me.We now are enjoying some of the fruit and labor from investing, she is a believer now!

These are professionals with additional training and a stricter code of ethics.

Buying lots and constructing houses on them would generally be ordinary income subject to SE taxes and not capital gains.Capital gains treatment would be the anomaly and exception.

@Wesley YuWanted to share with you a great way to tap into the equity built from your ADU.The problem today: most appraisers used by traditional lenders would give ADU square footage a second-class treatment than the main house (as some of your mentioned above) since there aren't that many comps and they're trying to be conservative.However, you can consider taking out a HELOC/doing cash-out refi through Figure.com (HELOC up to $250k, Cash-out refi up to $1M).