@Cade Schacher, There are a couple of exemptions for the two residence mark. 

Yes, 2 out of 5 years, but it's only one of the rules.If, like in your first example, you move out and then move back in, another rule kicks in - which will result in losing part of the exemption.

Quit claiming the property to him without consideration generally would bring gift tax returns into play and count toward your lifetime exemption. 

@Steven LangeIf it’s a business loan and non owner occupied typically the transaction is exempt from usury laws.

Guess, the experts are right here.Yes if you move back for 2 years you get full 500K exemption.

The owners have never lived in it as there has never been an exemption.

As long as the value of the estate is under the statutory exemption limit (about 5.5M for a single person and 11M for a married couple), then the estate passes tax free upon death, and as said with the step up in basis.Whether the property is held in a trust or not will not make a difference as to the tax liability.

@Stephen SawrieFirst $1,000 is exempt and in addition you can deduct half of the expenses (property taxes, insurance, etc.).

@Ryan Scott Isacksen  @Robert MarstonConsult an attorney to verify, but this is whai I found after a few hours research...... the "solution" is simple IF you are willing to do the followingOwner Occupy a FOURPLEX.....in Oakland that you buy..... .not a duplex or triplex.............ANDRent to Section 8 Tenants........Helpful Links................In the first line it says Section 8 Tenants are NOT COVERED by the Oakland Rent Control Ordinance https://www.tobenerlaw.com/oakland-rent-control/ http://www.tenantsunion.org/en/rights/section/subsidized-housing-section-8In the above it states thatHUD Housing and Section 8 Housing is considered Government Subsidized Housing and is therefore considered EXEMPT from Oakland Rent Adjustment Program!!!!!

I have also talked to several other people in the industry before the sale to make sure of this and all agreed that I would be exempt.