If you break the law that can be used to get around a LLC or other legal entity depending on the facts of the suit.John Corey

Would there be any legal issues if I was to sell my house to my sister-in-law for $100 bucks then rebuy it back to avoid paing the taxes on the big gain i've had so far?

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Even here, the law changes on Jan 1, 2008.

these deals require lots of involvment with the owner and the owner's full cooperation.Also, be sure you find out your local laws.

My sister-in-law told me that there are lots of properties for sale and a few large developments that look like they've halted construction (she does not know why).

You should definitely know your local laws.

This would not only be an ethics violation, it would be a violation of state law, as it could be proven that the agent wasn't acting in the best interest of their client.

You need to know the local laws as many times these properties are regulated almost as hotels and the contracts are completely different.

John gives good advice.When planning any building like this, check with the local planning and development commission to make sure this is doable before you spend any more time or resources on it.Here in seattle all single family lots allows a second accessory dwelling, sometimes called a mother-in-law.