Personally, as a matter of practicality, since they are allowable expenses I THINK the only issue the irs could take is just that its reported wrong, and you'd just apply it the way they want.

The only issue is that I don't think I can qualify for the loan I would need to do that.

Did you live in it the 1 year or 2 for the capital gains issue?

As you noted in your original post if the loan was signed on or before June of 2016, there is no issue. 

I really would like to know if you have ever had to litigate the issue or know of a case, you're relying on for your understanding of how the law would be applied?

When doing research on areas that you are interested in, I would identify industries with positive growth trends, analyze market reports, industry publications, and economic forecasts, consider emerging markets and technologies. 

Establish objective, non-discriminatory screening criteria, treat all applicants the same and you will have no issue.

There are so many forum posts from OOS investors, especially in California, who rush into something in the midwest and then get crushed by capex - a foundation issue, a roof, etc.$100K is a lot to put into a random property in the midwest... and, as is a feature of real estate, the nicer the property you buy, the less you're going to cash flow.Hope this gives you some things to think about

Because this is a real estate forum and not a contentious political issues forum. 

These types of procedural issues are always complicated.