It seems like an infinite loophole (conducting a 1031 Exchange every two years and subsequently claiming Short-Term Rental Depreciation repeatedly).

What is the loophole here? 

yes, I am taking after the loopholes, basically, if initial home is primary, and then converted to rental, and then move back to primary before selling (after 2 years), the first $500k is still tax-free.

@Chris PicciurroBut to your point I cannot call it a STR for tax purposes and use the STR loophole unfortunately :/

From this, you can chat with your accountant on how you can qualify for the short term rental loophole, for example.

Hey @Bill Bouillon, the two "main paths" we see investors taking for the maximum tax benefits (in general) are "real estate professional status" and "short term rental loophole".

The game's changed, but there's always a loophole or two.

Hey @Ingo Bothe, Indeed STR can give great tax benefits for folks looking to do the "short term rental loophole". 

Are there any requirements, loopholes, or pitfalls that we should expect?

Fannie Mae does have a loophole (taken directly from the Fannie Mae Selling Guide:"In order for non-mortgage and mortgage debt to be excluded from the debt-to-income (DTI) ratio, the other party has to pay the complete monthly obligation every month for a minimum of 12 months (and the other party cannot be an interested party for non-mortgage debt).