Avoiding taxes with family transaction

[Richard Boyd]

I have recently came across the following situation and was wondering if anyone had an input:

A friend of mine owns a property that is being bought by a gas station chain. It's selling for about 900,000. My friend wants to reinvest this money into a mobile home subdivision for 1.3 million using the 10-31 (his words). However, this property he wants belongs to his father. His CPA said its not possible to avoid the taxes because they are related. the state is Minnesota, not sure if that matters.

1. Is the CPA right?

2. If so, is there another loophole to avoid paying a hefty $200,000?