Which is cool, I'm not judging, 85% of self employed people flagrantly lie to the IRS (if the IRS hired a bunch of former LOs as auditors, maybe they'd actually catch people once in a while...). 

It's no fun having an IRS audit (mine took 6 weeks) and the stinkin $1.95 you try to use is not worth the time and effort to get the auditor off your back. 

I talked to the tax lady in the Auditors office yesterday and she said it is about 50% in Marion County, IN.

It took 6 months, cost 10k and when the final auditor came through she didn't even view the repairs/changes I was required to do to change from residential to business.

Account Closed, I'm not sure how it works in DC, but have you checked online at the auditor's website for the property owner info?

Well...I would say yes once occupied, or at least in liveable condition...appliances should not contribute...What is the land use code on the property...is it already listed as a rooming house or 4-19 unit with the auditor...and why are you seeking a commercial loan...non-recourse?

Have a house that is currently rented that just came available near me details are rented for $700 a month which is on the lower price for the area, they are asking 50k and according to the auditor site it's valued close to 70k just for details I'm wondering what would be a good deal to go for and what would be good terms if I could get them to do owner financing?

Maybe it's interpreted that she's living with you for free and the "rent payments" are gifts.Either way a junior auditor at the IRS could tear this 1031 apart before he's even had his morning coffee if you go through with it.May be advisable that you and your girlfriend rent a property from a third-party or buy another primary, rent this property to an unrelated individual, then 1031.

These strategies require professional guidance, unless you prefer to receive such guidance after the fact from an IRS auditor.

@Ryan Lucht, I'm no tax expert by any stretch of the imagination (before you judge my being a CPA, I'm an auditor :) - anyway, I'm fairly certain that you can only 1031 exchange a property to be used for investment purposes.