People should stop applying sale of goods theories to it.    

What is the current market valuation of the property based on comparable sales (defined as similar properties, within a 1-mile radius, within the last 30 to 180 days, that are within 10% of total square footage)? 

Would like confirmation on that though.For Solara, there seems to be no restrictions but a lot of houses for sale. 

Is there any creative way to avoid/reduce capital gains tax on the sale ?

You didn't mention where you are operating, but depending on average home prices, I think you'll be ok.For instance if we're talkin $500k homes, and if you will get a 2.5% commission, split that 50/50 with your Broker, you will end up with $6,250 per sale, right?

Q2 is most important: If the mortgaage is upside down, it would have to be an approved short sale and that could take a very long time to rectify.

When the smoke clears after a sale, everything falls to the buyer's responsibility.  

Buy a lot and build a house for sale in 2026.

I guarantee you don't have the right to "sell" that property as you've done because the bank has a lien against that deed which must be paid if/when you sell, and you almost guaranteed to have language that you are supposed to notify the mortgagor if/when you sell the property so that they can exercise their due on sale clause. 

All states have foreclosure sales.