He also owes federal and tax bills of about 50k.

Below are links to recent Indianapolis investigations  https://www.theindianalawyer.com/articles/49245-justices-agree-to-hear-rainbow-realty-rent-to-own-disputehttps://cbs4indy.com/2018/10/03/cbs4-problem-solvers-investigates-rise-in-rent-to-own-deals-across-indianapolis/https://www.indystar.com/story/money/2017/06/26/rent-to-own-contracts-challenged-federal-court/385195001/https://www.in.gov/icrc/files/Amy%20Nelson--ICRC%20Rent%20to%20Own%206-18-19.pdf

@Trevor Bragg when we are talking about buying a PRIMARY home then some very specific federal compliance laws come into place which limit what you can do comparatively to an investment property. 

Additional protections apply to federally-assisted housing.”Generally, you can’t simply deny someone based on things like Family status or any of the other protected classes as outlined by the fair housing act.Those classes include:ColorDisabilityFamilial Status (i.e., having children under 18 in a household, including pregnant women)National OriginRaceReligionSexAdditionally, some states are starting to set regulations in terms of the application process, ie. banning the charge of an application, setting mandates in terms of accepting the first qualified applicant to apply, etc.So it does vary state by state in the sense that some states may have additional protected classes and additional procedures by which a landlord has to follow.

@Lisa MaturoI think your first course of action is to determine what the tax would be on the sale of the property.Considering you used it as a rental property and took depreciation, calculating the gain/tax is more than just taking the fair market value less what you spent on the property.Factor in federal and state taxes into this calculation.You then want to see if there is a tax due and if there are ways to defer it. 

@Ben Feder, utilities have meters and accounts. 

In addition to your federal tax return, you may also have state filings so keep that in mind.

The question is how often does the federal government chase after a small fry like me performing a step transaction just trying to not run out of money in retirement.

Bay Equity, Greylock Federal, and Adams Community.

@Matthew WalshYou want to determine if there is a filing requirement at both the federal and state level.If it is a multi-member LLC, the IRS says no filing requirement if no activity.No activity is normally hard to do though if you created an entity and planned to do business; just my opinion.The state is another animal, The state may want a filing even if there is no activity.