Confusing Possible 1031 Situation

[Brandon Nahale]

My wife is looking to sell her house in the very near future, as we’re looking for more cash flow friendly investments. She originally purchased the house as an owner occupant in 2014, lives there til February of 2017, at which point she began renting out her house. Now that she plans to sell, she’s been informed that she qualifies to sell as an owner occupant, since she’s lived there for at least 2 of the last 5 years, but that she should do a 1031 as well because of depreciation recapture. To further muddy the waters, she will have a suspended passive loss on the property, likely about $5,000. The accumulated depreciation will also be roughly $5,500. She bought the property for $650k, and will list for $775. Does a 1031 make sense here? Sorry for the long, confusing question. I’m just not sure what to make of this. Thanks!