I have not heard of an extension as of yet.Your 100 hours is related to material participation for STR not the real estate professional status, they are two separate items but in a way can be connected (kinda).I'm not sure what you mean by "sell it for no bonus depreciation recapture" because you are required to take depreciation, if you don't the IRS should calculate your tax as if you did.Your head is in the right place and I wish you luck but would highly recommend consulting with a tax professional before proceeding if this is your plan.Best of luck Dennis!

(Proceeds to raise hand) Orlundo I got you.

If the renovation goes over or it takes a long time to sell the property, all your proceeds are wiped out.

Just do what needs to be done to rectify the situation, and proceed to the next issue. 

Can put as little as 3.5% down with FHA loan.4) Rent out your primary.You will have another 2 years to decide if you want to sell your former primary and still qualify for $500k tax-free proceeds exemption.

You might also consider holding back some of the sale proceeds in escrow until the seller has moved out as agreed.Make sure your insurance covers any work being done while the property is occupied, and check local tenant/landlord laws to avoid any issues.

There are a lot of ways to proceed, but you have to have a property first to worry about. 

So, you are left with the choice to proceed as is, negotiate a lower cost, get a concession, or walk away.I would get a quote and request a concession if they aren't interested in fixing it. 

2) Assuming I can proceed and put the home under an LLC of some sort, what would stop the tenant from just checking the county tax records and finding out who is listed as the last purchaser, and from there come after my family? 

Or, if possible, move into a different property, hold onto this property for another 2 years or so, (your circumstances have now changed) and you'd like to sell your investment property, 1031 all proceeds into a "like-kind" property and benefit from the 1031 tax deferral.