Sure you’ll be taxed on it.

We put together a purchase price, interest rate, insurance cost, and property taxes. 

i would speak to your cpa, as you may be able to get all or most of the gains tax free if they lives in it two of the last 5 years. vs what you can get if you rent it outof course consult with your cpa for tax advise

https://www.biggerpockets.com/forums/51-tax-legal-issues-con...

Rentals generate passive income, so an S-Corp offers no added tax benefit.

I have a property I'm considering seller financing with a wrap mortgage to a buyer, I'm currently refinancing the home and have the option to not escrow the taxes and insurance, which lowers the payment about 700/ month on the 1st position mortgage, BUT would escrow the T&I on the wrap mortgage. has anyone structured it that way what would be the pros and cons to structuring it this way? 

Selling a primary residence and then buying it back as part of a 1031 exchange could raise red flags with the IRS.Your parents have a valuable opportunity to defer a significant amount of taxes by utilizing the $500,000 exclusion on their primary residence.

Buying at the mortgage balance (~$150K) positions is under the fair market value and can trigger gift tax rules.

This is what the assessed tax value will reset to after you purchase.  

To markets where you’ll gain long term tax free wealth.