@Lucy ChangIn addition to filing a federal + state tax return - some cities/counties have their own filing requirement.It appears that San Jose considers you to be doing business within their boundaries.Below is a link to their website with instructionshttp://www.sanjoseca.gov/businesstaxYou can hire someone to do the proper filings for you or you can look at the instructions and do them yourself.You should look at the instructions on whether to put yourself as a sole proprietorship or a partnership.

@Patrick HallAs @Dmitriy Fomichenko accurately stated -rental income in an Ira or 401k is exempt from federal taxation.

Is that federal law or state-dependent?

It is like cash is worthless....Thank you Federal reserve!

A number of the online banks are offering interest at around 1.65% to 1.7% which is pretty good, and federally insured.If you are willing to hold onto something for a few years, I would consider Treasury bonds. 

Also, (in my state not sure if it is the same everywhere) but after the redemption period expires and you go through the legal process to become the owner, all other liens (except federal) are removed as long as everyone was properly notified.

I just got an updated good faith estimate from navy Federal.

There are people sitting in prison for committing fraud with federally regulated financial institutions on real estate.That you are even asking the question could be evidence enough of your intent NOT to occupy the property.

This can be plaintiff or defendant in business disputes (partnership breakups), consumer DTPA claims, breach of contract, specific performance, probate (title issues), adverse possession/trespass to try title (quiet title actions for breaks in the chain of title), or suit for declaratory judgement (interpreting a contract or boundary).I am admitted to all TX state courts, and the Federal District Court for the Southern District of Texas. 

Albeit, at the advantageous long term capital gains rate, so probably about $15k in Federal tax.