1031 to buy parent’s home at market rates

[Account Closed]

I’d like to buy my parents’ primary home at market rates then rent it back to them so they can add their equity to their nest egg and boost their retirement.

Details.

I live in TX and am selling a SFR in San Antonio. I was planning to roll the investment through a 1031 into a new property once this deal closed.

My parents live in AZ and their primary home has appreciated due to market conditions; however, their retirement accounts are not very robust. 

I was wondering if I could buy their home at current market rates, then rent it back to them at current market rates. This would allow the easy transfer of their property to me (I’m an only child), give them greater capital to invest to pad their nest egg, and give me peace of mind that the home was being well maintained. 

I know the 1031 rules around relatives are stringent but I wasn’t sure how the IRS would view this - what do y’all think?