There have been many rumors from various sources recently about limiting the 1031 tax-deferred exchange.

However, I'm not a CPA and would defer to @Brandon Hall to provide his expert opinion if he can.  

You can treat the receipt of the earnest money deposit as taxable boot, and defer everything else through the 1031 Exchange, or you can contribute the earnest money deposit back into escrow, then structure the 1031 Exchange transaction with a Qualified Intermediary, so that everything would be tax-deferred.The siblings would each be able to choose what they individually wish to do as long as they truly own a 50% undivided interest in the property such as tenants-in-comment.

This money can grow tax free or tax deferred for decades.

No reserves (the property showed lots of deferred maintenance), over a 30% rate of accounts in collections, 2% of units in foreclosure and generally no guarantee that this HOA was not about to implode.I continue to watch this community and the sellers are essentially dumping their units as fast as they can, so I presume the HOA is coming out with a huge special assessment or other bad news has made its way through the community.  

Selling property through a seller carry back note would allow him to spread his tax liability over a period of time (depreciation recapture is likely taxed in the year of sale, capital gains would be taxed over the term of the note).However, it sounds like he is already thinking of reinvesting in another replacement property, so he would likely want to do a 1031 Exchange in order to defer all of his taxes.

This is where i pasted the info from :) I will defer your other questions to more experienced investors.

if you sell one for $200K and you sell the other one for $100K you need to purchase at least $300K in real estate to defer all tax.  

While your actual student loan payments may be lower (income-based) or even deferred, FHA guidelines state you have to use either a) the "actual documented payment, provided the payment will fully amortize the loan over its term" or b) the greater of  1 percent of the outstanding balance on the loan; orthe monthly payment reported on the Borrower's credit reportI suggest you get a second opinion from another local lender.

The rents are low in the building. there is deferred maintenance of at least 30k.