@Ashish AcharyaSo basically should a 2 member LLC for operations, not for rentals choose S-Corp taxation or partnership taxation to minimize taxes?

Generally speaking, taxation on owner-financed sales if beneficial to the seller, but your mileage may vary.

  $115,000 Profit taxed at individual rate for short term capital gain (35%) and i am not going to go into S-Corp taxation status for simplicity. 

If so, there are 20+ accountants on this site that specialize in real estate taxation. 

And in less than two months is the election, so the taxation can change, and the political stance on subsidies, money for everyone, etc could significantly change.

Should the Congress forgive this repayment aka waive the tax at some point - would it apply retroactively to everybody or only to those who opted in?

I couldn't see the benefit of establishing an LLC at this point, as i want to keep the benefits of non-commercial financing and taxation on this current househacking situation, and my other property that I will be moving to permanently.  

You should consult a good CPA regarding taxation and what are the best choices to make when choosing an entity to create.

If so, there are 20+ accountants on this site that specialize in real estate taxation. 

From what I understand, however, the challenges you'll face are significant, including:Restrictions on ownership of a U.S. bank accountDifficulty getting investment funds into a U.S. bank accountSevere taxation of foreign real assetsI'm happy to put you in touch with him.