Because of this I believe it is important to mitigate as much liability risk as possible.

Since that is the case, each of the tenants can make their own decision on whether to take cash and accept tax liability for their % of the sale, or to do their own exchange with their % or to combine with each other.The problem is if you already own that second property and are wanting to pay down debt.  

I recently did a 1040X, but had no tax liability thanks to depreciation from several properties.

LIABILITY FOR DAMAGES, INJURIES, CLEANING, ETC.

The only time that the chickens come home to roost is IF the investor sells and cashes out before death, and there are ways to manage the tax liability with proper advanced planning.

Here's how the meetings have gone, in order of my interviews with them:CPA#1: "There's no tax benefit to having an LLC, only the reduction in liability benefit, so it's up to you to figure that out with a lawyer and insurance agent, but most of our clients form LLC's for flips."  

My 4 units are about $800-$1000 annually on a commercial policy with $5 million liability.

@Edward MccrackenI agree that it makes sense to contribute to your own retirement account (403B) to reduce your tax liability and give less to uncle Sam.

At the beginning when you are small, the pm is a liability not an asset.  

If a raw land parcel was sold at a profit, with the seller owning this parcel for more than 1 year, with the seller being in a 15% tax bracket ( from regular job ), would there be a capital gains tax liability ?