There should be an attorney with tax as well as contract/biz law who can properly advise on this. 

If all your incomes are Passive Income, you do not need to pay any self-employment Tax as a single member LLC.

For example he will be required to pay not only capital gains but also depreciation recapture, the Obama tax (as mentioned above) and his medicare premiums will most likely go to the max for 2 years, longer if the sale is spread across different years. 

I also wonder how this is going to work.. you cant tax a parcel that has lost a 5 mil dollar improvement ??? 

Currently thinking of selling my personal residence, almost 2 years in April so I can take advantage of not having to pay any capital gains tax as well has been turning into a headache trying to renovate the house itself. 

You'll pay your fed income tax rate - whatever that is - but then you absorb a 15% self employment tax as well which is why most ppl say there is a 35% - 40% tax on flip and when you add both taxes together that is accurate.  

Education is expensive and paying the dumb tax as quickly as possible is the fastest way to propel growth. 

Total up all of the saved property taxes plus the saved transaction costs plus personal disruption avoided value plus $500k and compare that number to what your friends paid -- and that assumes they paid long-term capital gains tax as you will. 1031 exchanges just postpone the pain.

As soon as you rent it out you’re paying the same tax as an investment property.

This approach can help you scale your portfolio while minimizing taxes.Key Tax Considerations:Tax-Free Profits – Each sale qualifies for capital gains exclusion if you meet the 2-year rule.Watch for Depreciation Recapture – If you rent it out before selling, any depreciation you claimed will be taxed at a maximum of 25% for Section 1250 property.Choose Properties Wisely – Focus on homes where renovations bring real value—avoid over-improving beyond the neighborhood.1031 Exchange Option – If you decide to hold a property instead of selling, a 1031 exchange can defer capital gains taxes.California Taxes Still Apply – Unlike federal law, California may still tax a portion of your gains.Potential Risks:Market Fluctuations – You may need to hold longer if the market shifts.Renovation Costs in LA – Budget carefully, as construction expenses can be high.