Scott,

Thanks for your reply.  I have considered salary sacrificing some money into superannuation.  But that's only going to look after $40 – 50K.   I have also looked at looked at taking a year off, and getting the mrs. to work fulltime (this saves us another $25 – 30K) and also allows some time with the 3 kids.  In terms of capital losses I have none to offset (share trading has been in my mrs name to reduce tax burden).  I was hoping to find some legit way of reducing a bigger portion of my total taxible income by giving it away to the govt.  I don't want to sound like a sook here but the way I look at is that I have taken all the risk and the govt still gets to take a cut without taking any risk. 

The main purpose for wanting to sell the IP is a number of things:

1. to pay off $320 K of PPOR debt which is non tax effective and for which I am finding more difficult to maintain all debts totalling $730K ($410K of which is allocated to investment) based on my current cash flows;
2. to sure up my cash flow for kids education (the first of 3 kids are just starting to go to private school (high school level)That's 16.5K pa. per child.  (this one is call self inflicted pain);

Unless some legit loop hole pops up that I don't know about, I will probably do one or a combination of the things you have mentioned, or but half the IP in my wife name which will enable me to shift all the debt across to the IP and close off my PPOR debt.  However this is not as sweet as it looks because the mrs. is only working part time earning $15K so the tax offset with negative gearing on her half of the IP is not of any major benefit and there is also stamp duty to consider.    Howevr the one thing this does is help reduce my capitial gains by half and slightly improve my cash flow. 

So I guess