The irs doesn’t care about the title holder, it only cares about the tax payer being the same on both deals. 

But what about the existing vacation rental permit holders?

We did this for our out of country investors back in the day and as soon as word got out, they shut them all down due to the Patriot Act...Was a huge pain in the A$$.Doesn't the account holder have to show up in person otherwise they aren't eligible due to the Patroit Act?

They also did get a subordination agreement from the second lien holder but it was executed by their power of attorney.

The deed holder should be an LLC, but no need to over complicate the process.

Well, let’s say the note holder does accelerate the note as a result of the title transfer.  

Passive investors are equity holders in a leveraged deal and their invested capital is at risk.

For other folks, here are some other entities that would, if you sold the property to, have negative tax consequences: YouYour spouseAny of your lineal ascendants or descendants (parents, children, grandchildren, and the spouses of children, grandchildren, — including legally adopted children)Any investment providers or fiduciaries of the IRAAny entity (like a corporation, LLC, or trust) where a disqualified person owns more than 50%Any entity (like previously listed) where the IRA account-holder is an officer, director, a 10% or more shareholder, or a highly compensated employee

3rd federal savings and loan might do it they are based in OH however I think they want to be first loan holder so it would need to be paid paid off free and clear also I was told they have a heloc that they will pay a portion or all of the closeing cost I used them on my prime residence vary good rates however the rep I worked with was very vary slow with responding and pushing things along good luck I will be doing this same thing on 2 rentals soon so be sure and post what you figured out thanks

My concern is the current lien holder (Navy Federal) being notified of the second lien (not in the original purchasers name obviously) and then calling the note due.