If you father agrees to pay you 3X the market rate, that may run afoul of IRS rules about gift taxes.

Does the IRS consider this income? 

There are certain pockets that are fit for fix n flips, but as far as rentals go, I've had investors hop all over properties in those neighborhoods, for the right price.

According to my accountant, there is no longer an ability to deduct mortgage interest for a delayed financing mortgage (a mortgage for a primary or secondary home that is taken out within 90 days after the home is purchased) under the new tax laws.I pointed him to IRS publication 936 to argue the contrary.  

Here is a  list of the qualifying exemptions (IRS Link below)If they're moving for one of these reasons- they will qualify for prorated gain exclusion. 

Also make sure you are doing the correct accounting with the IRS.

Some groups will utilize 4506t and run a tax transcript from the IRS. 

The IRS is looking to see  that the tax payer purchased at least as much property as they sold and that they used all of the proceeds in the purchase of the replacement properties. 

What's the odds that IRS would audit you just because you file rental business losses 4 or 5 years in a row?  

It may be difficult to obtain it afterwards.Ultimately, the IRS is putting the onus on you to help the tax system work better so everyone reports their income.