If my CPA is still around, my guess is he'll say just do the split 50/50, the IRS is not going to go back 30 years and see how you depreciated and split expenses, so 50% owner occupied it is.

It's sufficiently off that I'm going to go out on a limb and suggest hopping off the internet and talking to a local lender.

Are your folks ready to write a check to the IRS when title transfers to you?

The Zestimate shows a strong upward trend for home prices.I told my real estate friend I’d like to invest and he said we should hop on it fast since home prices are going up so fast to ride the appreciation which is about 2.7% each year according to Zillow.There’s a really great townhome in an awesome location that’s 4B/4bath going for about $230, which if my wife and I were to move into now we could use an FHA and our total would be about $10K.

@Marina Wong when you mention being a real estate professional, are you referring to IRS 'Dealer Status'?

But the IRS will say that you are taking profit. 

How do you get a hold of your past tax returns when the IRS transcription service is down for two weeks, and local tax offices have stopped taking phone calls or providing copies?

Don't mind me while I hop in and see if I can make it work there too!

If there is an IRS lien, it does not automatically go away.

The IRS when conducting audits allows reasonable subjective positions, but they also look for consistent application.