Interesting 1031 and $500k capital gains exclusion question

[Justin Summers]

A good friend of mine just sold his rental and is in his 45 period and can't find much out there that is not over priced. He is worried that since he has to identify properties in the next 45 days and  buy something in this market he may paying inflated prices and lost money when he sells in the future.  I just moved out of my primary home and rented it out for 2 years.  I'm planning to move back into it after I retire in 3-5 years. I have about $500,000 appreciation in the property

This is what I was thinking. I could sell him this property for $800k and he would satisfy his 1031 exchange. I would have to pay little capital gains on the sale considering I'm married and fit all the other $500k exclusion parameters.  I would like to have agreement to buy the property back  after the current tenants move out in 2 year for the same price I'm selling it to him..  He would be happy getting the rent for 2 years and knowing that he is not going to lose money on the sale. I would be back into the property in 2 years with a new basis of $800k instead of my current $300k basis..  It seems like a win/win.. (I could use the $800k for the next 2 years myself and get a better return than if I kept the property and collected the rent on it.

How would the irs view

1. Him buying an 1031 property and then selling it back to the same owner 2 years later? 

2. Me selling my primary resident and getting $500k profit tax free and then buying the property back 2 years later?