Every $100k in gain up to the limits, $250k (if single) or $500k (if married) will save you $15k in federal taxes and I’m guessing $5-10k in state taxes?  

If I have to pay taxes on my income, SO DO THEY!

Sold it a year after that and walked away with $400k, mostly tax free. 

You can always "borrow" or withdraw the principle since you already paid taxes on it.  2. 

Why does everyone want to fight so hard to lower standards?

The value around $20k according to the local tax office.

If I continue to pay the mortgage in the the seller's name (with out refinancing) would they claim the mortgage interest tax deduction or do I get to claim that since I am paying the mortgage and hold the deed to the property. 

Even if you are actively operating as an STR the lender will look to tax returns for income, so if it has been less than a year they will still go on LTR income.You need to factor in that your lender is going to underwrite any loan based on LTR income only. 

I don’t see a huge issue with a 5-year term right now as most folks are planning to refi in 2-5 years at a lower rate anyway.

He contacted the person to see what the guy would give him but the guy tried to talk him down to a lower down payment.