Selling Primary Residence to Entity Owned by Me (LLC etc)

[William W.]

Hello.  First post here but I've been incredibly impressed by the level of knowledge and sophistication of the community.   

I've seen this question asked before but I haven't seen an answer that address my specific concern.

I have a condo that I've owned as my primary residence. I have a $250,000 gain that I would like to preserve. There is no mortgage. I'm considering either selling it or renting it out. If I rent it I would want it in a Delaware single member LLC for liability protection.

My question:

1. Can I create a single member LLC (or other type of entity) that would buy the property from me at the new fair market price - either financed or not - and preserve my tax free gain.

2. The new LLC would acquire the property at the new fair-market stepped up basis and rent it out.

I would like to rent the property out but don't want the direct liability. I also would like to lock in the tax free gains. If I sell it to the LLC there would be transfer and title taxes but they will be much less than the taxes on the gains if I rent it out and choose to sell it in 5 years.

I will consult with a CPA but the worse case scenario would be I go through all the trouble to sell it to a single member LLC and somehow lose the exemption on the tax free gain.

Thanks