Alex this is not a good deal unless it was free even then it is going to be frustrating. First I would suggest to any new folks this is a terrible way get a deal. Its true what wy8e speculated that it will be a good learning process for you and it will involve some learning however it also going to be frustrating unless you get some first hand help in the process not just reading about it in a forum, suggest you find the engine guru in your club.

If the threads are so bad that a nut will not tighten at all just turn then no a thread chaser is not going to do anything. Forget the suggestion above about cutting a smaller size, first off you tap a hole not a bolt thread and that involves using a die, not a tap sometimes called a thread chaser. And second a crank is hardened hi test steel you are not going to just just cut it smaller, no way.

If the damage is very-very minor then using a 1/4-28 die chaser may help but you could not do this assembled anyway with no good way to hold the crank in the case without damage.

Your crank will almost certainly need to be replaced and I recommend you get hands on help with the process. To others folks who are new deliberately buying a damaged engine is almost certainly going to be expensive in terms of frustration and/or money and precisely the reason I always suggest used engines and radio systems is very unwise for new folks. Used airplanes: sure but not the stuff that counts.

Just one persons opinion here

John