I heard about this method on a BP podcast, but I'm unsure of which podcast it was on.Maybe this contract is set up so that only the seller signs it because the buyer is a variable until he or she is nominated.

.* The taxpayer can acquire title to the property under a purchase option price that is nominal in relation to the value of the property at the time the option may be exercised.* Some portion of the rental payments is specifically designated or readily recognized as interest.* The sum of the rental payments and purchase option approximates the original purchase price plus interest and carrying charges.* The lease requires the lessee/buyer to make substantial improvements to the property.Keep in mind that no single factor is determinative, and that additional factors not listed above may also influence the result.You should also keep in mind too, that it will not be the IRS who determines whether your contract falls under the scope of Dodd Frank- it will be some local judge when your PO'd tenant buyer and his attorney take you to court and sue you for the past three years payments because you didn't "take under consideration the borrowers ability to repay."

You can not give the home away, or sell it for something nominal- like $100.

It is not a matter of condition, and price is now only nominally above the last tenant's rent.

I would tend to agree with @Che Chiu Wong while the results mathematically may not be trivial, the realistic implications are nominal at best and misleading at worst. 

I saw a post on BP one time about offering a nominal payment to the tenant AFTER an eviction if they left the property in reasonable shape - and *before* accounting for all the other costs that go on in the aftermath.

We also charge a nominal ($20.00) application fee which helps defray some of the cost of conducting background checks, but primarily serves as a first filter.

It costs the tenant a nominal feel.

I just pay myself a nominal salary and the rest of the earnings are disbursed as dividends to the stockholders (me).To answer your last question, I believe you do have to pay taxes in each state.  

Still, I'd be in favor of getting an assignment, declination to serve and nomination for appointment.