The IRS could apply this doctrine if it appears that the series of transactions are structured primarily to achieve a specific tax outcome, such as avoiding taxes.Regarding the 1031 exchange, while in-laws are not considered related parties, the transaction could still be scrutinized due to the complexity and nature of the other transactions involved.

I was then told that's the rate for the area.

Thank you for your contribution to this post.

One of the best ways(not the most exciting) is cold calling owners.

Over the next couple of years, I don’t plan to use the property often, but I may stay there occasionally when it’s not occupied.

The won't insure you or they will jack up the price considerably. 

@Varun Chawla I'd love for other experienced investors to chime in on this post because I'm interested in the numbers. 

Given the fact that if  there is a gain a future year the prior year loss can offset it, it seems that one would want to file the loss so they can offset that gain.

There are lots of good responses to your questions posted on this thread.  

This approach does not work on every deal, but if they are doing 1 out of 3-5 deals like this, it really helps the fix & flipper to develop long term wealth, rather than just chasing the next deal for chunks of money.