If it truly is an investment property could you do a 1031 exchange to defer capital gains and have even more cash in hand for a down payment on a multi-family?

When evaluating the deal for my own personal benefit I do.

Why Sellers and Buyers benefit Subject toSelling your House optionMany Sellers currently in a position where they have been trying to sell a home, but aren’t having the success they believed or were told they would have in today’s real estate market?

I have nearly $400,000 in investment accounts...would I be able to liquidate $50,000 and 1031 that money into the down payment and avoid the capital gains taxes?

I am eager to take the next step and make some connections in my market and potentially gain mentors and future business partners in my area through meetups etc.

The benefit of the S corporation is being able to ALSO take distributions that aren't subject to SE tax.

You'll be able to defer federal however and that would create a net benefit as long as the 1031 didn't cost you an arm and a leg (figure 750 for one).  

Posturing... many of those that would vote on this probably themselves have benefited directly from it.

Now I'm not quite sure how the taxes work but is it possible for them to reap the tax benefits as well?

Even if you get the property you will now pay taxes on the gain as it doesn't get "stepped up" as it would be in a will.I believe your stepdad owns the home outright and you really have no rights to it, but hopefully a lawyer will tell you differently