Not a good idea in any circumstance.

Have a discussion with your tax professional about "unforeseen circumstances" regarding the sale of the residence. 

Even if your circumstances change, you will have a lot of good options.

Your story is a great example anybody can change their life no matter the circumstances.

It may be expensing or capitalizing based on circumstance. 

A lot of hard money lenders today are able to lend on  auction properties depending on the circumstances, but be forewarned there could be a number of issues such as your inability to see the interior and how much it may need or the homeowner may still be present and you may have to get an ejectment after purchasing.In short, I would strongly recommend not purchasing at auctions UNLESS you're going to make it a chief strategy of yours and really put in time learning the details, going to auctions and just watching how they unfold, etc.

Investments should be made from a position of strength, which means having the financial ability to handle unforeseen expenses that will pop up.

We've received a stop-work order before in similar circumstances.

some CPA's will go with what your intentions are and your circumstances.. it might be worth taking a shot at Cap gains.. if you get audited though and they deny it you could have penalties.

Releases or discharges of the liens must be negotiatedwith the Comptroller of Public Accounts.Municipal LiensCities have the power under certain circumstances to assess property owners and to file the liensagainst properties, including: (i) paving liens; (ii) weed liens; (iii) dangerous structure liens; (iv)utility liens; (v) plumbing and sewer liens; (vi) swimming pool liens; and (vii) clean-up liens.The requirements and limitations of each of the types of liens is determined by applicablestatutes, as well as the priority of the liens in relation to other liens of record such as tax liensand mortgage liens.