This brings the discussion more into the realm of our personal principles concerning our family ethics and whether or not our parents deserve that type of treatment.  

It also allows you to use any excess sale proceeds to improve the acquired replacement property as part of your 1031 Exchange transaction.The proceeds from the sale of your relinquished property that are used toward the acquisition of your replacement property as well as those proceeds that are paid or used for improvements to your replacement property will qualify for tax-deferred exchange treatment provided the transaction is structured properly as a Build-To-Suit Exchange.

If this is the case, your half of your duplex receives the same tax treatment as a single family residence, expect for mortgage interest treatment.

It's giving every potential tenant the exact same treatment.  

You could 1031 Exchange into a property and hold it as rental, investment or business use property for a couple of years (ish) and then change you intent and move into it later, but if your original initial intent is/was to use it as your primary residence it would not qualify for 1031 Exchange treatment.  

That is NOT the norm in the real estate business and these people that often break laws think they are entitled to special treatment!

He was also undergoing cancer treatments which were going to be canceled if he didn’t pay some of his bills by the end of the week.

Whether you actually flip the property for a $10K profit or get a $10K finders fee, the the tax treatment is still the same -- Schedule C income subject to self-employment income taxes.

He is going to fly into the US to have treatment and wants to use this foreclosure to keep his mind off of cancer while he receives treatment.

If they have NH clients already, they will already know the NH state tax treatments.