Keep in mind you could have additional cost for new furniture and fresh paint (cost us just over 15k) for 1800 sqft.

She wants me to get the home and land but want to give the money she would receive from my down payment ($80k) and monthly payments to her estranged son’s children.

This is a house that has additional square ft added on, so they listed that as the reason for marking the question as positive, as new foundation and support was added for the additional sqft.My question is: Is it a standard practice to check this box as "yes" in the disclosure when additional square feet has been added on to the property?

And hopefully with the proper depreciation, you'll pay no income taxes on the money you do receive from the rent.

Had I accounted for the additional California capital gains taxes in my original calculation I may have opted for the exchange...

You have to use sales price minus sales expenses to figure out what amount you need to buy.You can potentially factor in your suspended passive losses to determine how much 'boot' you can receive.

In addition there is a plumbing error that is now costing an additional $8200. 

If you wanted to take it a step further, you can have them add your LLC as an additional insured to their insurance.

Some additional posts for your series:How you ID potential purchases?

He asked them to add it to the loan and he would pay them monthly as agreed.