Guy thinks, okay, and wishes for a million bucks, and bingo, the genie produces a deposit slip for his checking account in the amount of a million bucks, and then declares "and two million for every lawyer on earth."

., pay taxes on $176K of income you didn't actually get), declare bankruptcy of some combination.

Thank god the owner declared bankruptcy in that 10 day period.

A principal residence does not qualify if it was purchased in a §1031 exchange within the previous five years.In essence, the Treasury has declared that if an owner lives in the residence long enough to meet the principal residence requirements, they may then convert the house into a property “held for investment†which can qualify for a §1031 exchange.

In short, if you declare bankruptcy the courts cannot seize your homesteaded property to pay off those debts. 

And in my area, they tend to be cheaper than sf, easy to rent, and have appreciated nicely (few blogs about them as appreciation plays)..The key is also finding an association where you even can rent them  (allowed by condo declarations/by laws etc), and even the organizational culture needs to be open to renters (many forums on restrictions).

Susanne, so what you are declaring here is you will engage in "brokering without a license???"

Would I have to declare it as a rental then?

You have 45 days to declare your new property (up to 3) and 180 days to close.

All that other stuff is just negotiating the payment terms to the seller.Normally, the seller gets a great capital gains advantage in that interest becomes declarable income over time and reduces the taxes to those paid each year, not at COE.