You will have to pay up the property taxes.

Your resident state CA will tax all of your income, including out-of-state gain.

I like the idea of getting around short term taxes and legislation.

For estate planning purposes, we want to change the title to a revocable trust where my husband and I are the trustees. will this have a negative tax implication for 1031 purposes if we want to sell these and purchase properties prior to my husband's passing?

To answer your question: My latest fund has been around since 2022 but I have done five full cycle offerings prior to that starting in 2018.

There is no inheritance tax given the value of the estate.

The date of the foreclosure is prior to my contracted purchase date.

My question is do I need to use all of the equity towards the down payment of the property, to avoid capital gains tax? 

Those that respond “$0” or something ridiculous, you can request income documentation from them to justify.Don’t be afraid to share with them how much your property taxes & Insurance increased and that YOU cannot afford to absorb them.ALWAYS get an increase or something of value annually or tenants will start thinking they should never have an increase, making future increases that much more difficult to negotiate.

Never let the tax tail wag the dog.