I know that this in itself is not a taxable event.  

We are talking about gifts for real estate, which are not taxable, and have no limits. 

So I have a SF house that we will have owned (and lived in) for two years here fairly shortly.IF after 2 years of living in it, we tear the house down, scrape it, rebuild on the same lot and sell it for say a 400K gain, is the gain taxable?

If they issue a 1099 to your SSN, the interest becomes taxable to you, and it's hard to get the bank change the 1099 after it has been issued.

That income is going to be taxable whether you later user it to improve the MHP or not. 

You can buy less than you sell and you can take cash out but you don't get to take out non taxable original capital first.

Once the rental property sells, are we allowed to reimburse ourselves those up front costs from the sale proceeds without it being taxable?

And income derived from any other state is taxed in the state you live.. although rentals as we know has very little taxable income. 

They will often have a higher tax equivalent yield than a taxable savings or money market.

I am simply using more precise language.I do this because Unrelated Business Taxable Income (UBTI) is generated when a tax-exempt entity engages in a trade or business on a regular or repeated basis (i.e. flipping houses or other types of dealer activities).