Take your sales price, minus selling costs, minus any capex, minus purchase price and that’s your taxable gain.

Also, I'm not sure how you're paying attention to it on the tax side, but the unit that you are living in's profit at sale is calculated differently than the other unit that you're renting out.Once you move out, that unit is officially available for rent so from that point forward, any profit gained at future sale will be calculated starting from that point and will be taxable.

but if i go in a LLC with them i get hit with the tax from the sale of the homeThe GC and the flipper were just going to split the profits from the sale of the home and they were going to pay me 2%/12% for the duration of the build. 

While not as widely discussed as interest rates, capital gains taxes also impact home sales.

The auctions, although online now, are live foreclosure auctions, i.e. the auction style sale which is the culmination of the foreclosure process. 

@James Thompson Transferring property from your in-laws to you can be done through a gift, sale, or trust transfer, each with different tax implications.

To defer all tax you must purchase in total at least as much as your net sale.

This would allow us to come to the table with less funds out of pocket on the front end when starting construction.Is the best way to complete the transfer of ownership through a traditional sale registered with the county? 

Quote from @Mike Hern: question is, since you have to take the depreciation, and recapture at sale - what's the point?

In his words, this is away around the due on sale clause that you can run into in a sub - to transaction.My question - if the seller puts the property in a trust, will this avoid the potential of a due on sale clause?