I personally like the idea of being able to purchase two properties for the same amount as funds as what you would be putting down to purchase the one. 30 years from now when they are both paid off would you rather have 1 for the price of 1 or 2 for the price of 1 by deferring these extra cash flows you could be receiving.

That will allow him to defer capital gains until he sells his new property.

Always happy to help.Yes, you would essentially defer your tax burden because the depreciation would reduce your cost basis of the house when considering your capital gains calculation when it comes time to sell.But, the deck would be depreciated over 27.5 years.

If he does a 1031 capital gains are deferred it yes there are no capital gains unless there is a gain to tax

Otherwise the entire duplex could not be 1031d.The rule in order to defer all tax in the 1031 is that you must purchase at least as much as your net sale ($600 ish if there was no loan at all) and you must use all of the cash proceeds ($600 ish) in the next purchase or purchases.  

They offer deferment, which is always a good Plan B just in case.

Try a lease option with right of possession and cash when option is exercisedTry a 100% owner financing deal with a percent of the profitOffer to make repairs as the down payment subject to a first mortgageOffer a trade of one of your  properties subject to the saleTry a 1031 tax deferred exchangeOffer a created note secured by another property for an even trade or as down paymentAsk for the deed so that you can get a 80% mortgage - seller retains 20% ownership or a mortgage secured by a personal note (not recorded)Ask the owner to refinance subject to a onetime assumption by you - he keeps the cash, you get the deed and make payments on his mortgageJust a few ideas -We investors should always look to creative financing methods and should always make offers - regardless of what the seller wants - PUT IT IN WRITING!

Sometimes it's better to take care of deferred maintenance when the unit is vacant.

Flipping, if done regularly and consistently enough, could constitute an active trade or business and doing so within the 401k could subject the returns to UBIT.You are correct that passive investments generate tax-deferred gains within the account until the funds are distributed.

Now, for the long term, you may be better served by investing in tax deferred accounts, or a Roth, because CDs will be taxed at interest income, not a lower capital gains.