Selling the property within your Solo 401(k) and returning the proceeds to the account simplifies compliance and ensures tax-deferred growth (or tax-free in a Roth Solo 401(k.)).

Stationed there almost three years, sold with profit and tax break for how long we lived in the house.

The Big plus is the tax deductions they will be able to take as well!!! 

And would this be considered "capital gains" since it's re-sold under 1-year therefore having to pay a large % of tax on the profit?

You get your tax benefits.

You want to make sure the seller is getting their fair side of the deal but especially from a tax perspective, there are ways in which you can make it very lucrative for them.

Your best advice would come, for a Tax Advisor NOT a Tax Preparer (CPA).

The Numbers:Cash Flow Analysis: Investors typically look for properties that will generate positive cash flow—meaning the income from rent covers the property’s expenses (mortgage, taxes, maintenance, etc.) and then some.

I’ve read quite a few posts about foreign investor financing but most seem to deal with non-citizen investors without US credit or personal tax filings.

Here are some thoughts I hope help.The benefit of selling now is that as an inherited property you will likely pay no taxes because you inherit it at a stepped-up basis.I'm not a huge fan of buying a house that has lot rent.