Greg Scott is correct, you will have to pay capital gains tax on any monies you take possession of. 

There's a few other things to think about too: 1 - Possible owner financing if he wants to still get a stream of income into retirement at an attractive rate compared to the rest of the market (win/win scenario, you don't need to come up with as much cash, and he makes a little $ on the %) 2 - Consider a post possession if he needs some time to move out but needs the cash up front for whatever reason 3 - Leave all the furniture/junk in the property and you'll handle clean up etc. 

I recommend finding an accountant who specializes in real estate taxation, tax planning and financial planning. 

After looking at well over 150 properties myself (pre-foreclosure, probate, wholesalers, etc) and talking to dozens and dozens of investors who are very experienced in the Chicago market as well as a couple of brokers that specialize in investment properties and move 1,200+ REO properties per year, I've been told by every single one of them that deals with this criteria are almost non-existent in this market.In speaking with one of KFN's own people I was told they only know of one deal that's been done in Chicago that meets their criteria.This is smelling very, very much "scammy".When asking one of their people about getting a refund because we've found no properties that meet their criteria and have gained no value whatsoever from their program, we were initially told that there's a 3 day right to rescind and after that all sales are final.I've sent email to their CEO and have yet to receive a response.I'd like to believe that companies still do business with integrity and do the right thing and give a refund when a customer is dissatisfied with their product/service.

But definitely find out from a CPA that specializes in STR and tax deductions! 

One month later, lawyer for HOA wrote me a letter saying they made a mistake in computing the special assessments and $62K more is owed.

Success in real estate requires at least two of the following, thou possessing all three is better; capital, knowledge and experience.  

Another option could be a private lender or a community bank that specializes in investment properties.

Looking for recommendations for design services that specialize in furnished midterm rentals.

You do need to send in a check with the extension, the irs provides guidelines for calculating the amount.Real estate investing complicates taxes sufficiently that I have found I save way more than I spend by having a CPA who specializes in real estate investor tax returns.