Which house should I sell for greatest gain?

[Leanne Pressly]

I could use a crowdsourced opinion and numbers audit on a decision: I was planning on moving into one of my rentals this summer and I'm getting cold feet so I started crunching numbers again and it APPEARS that it makes more sense to stay in my primary residence and sell the rental instead?

Stats:

Primary residence purchased in 2004 for $209K; Market value now $670K;
Rental: Build completed in Dec 2019 at cost of $330K Market value now $600K;

Option A: Sell Primary residence now for $670K move into rental, sell rental in 2 years at $725K. cap gain now would be $0; cap gain in 2 years $395K
estimated tax=$59K *I'm not sure how to calculate this because for 2 of the 4 years it will be a 'primary residence' while we're living there?

total gain on both properties after 2 years: $461(primary)+$395 (rental) minus taxes of $59K=$797

Option B: Sell rental now for $600K (Or do I need to wait until Dec to achieve long term Cap Gains rate?) stay in primary 2 more years and sell at $850K. cap gain now=$40K cap gain in 2 years $0

total gain on both properties after 2 years: $270 (rental)+$640 (primary) minus taxes of $40K=$870

Assumptions:

1. In both sale scenarios, assume 3% realtor fees for FSBO. I just left this out of the equation.
2. Market currently appreciating at 10-15% year over year. I used 10%
3. In 2 years, cap gain rates unpredictable (Biden could raise them; our income bracket would most likely decrease)
4. Must space out sale of "primary residences" by 2 years
5. Not really interested in making either a rental
6. In 2 years, we'll have new house to move into (building that next year)

Other things I'm thinking of:1) I have an awful HELOC interest only loan for $229K I MUST get rid of ASAP. If I can't generate the cash to do so fast, I'll do reverse mortgage on one of my properties to raise the funds.

2) If I move to rental, I'll need a storage unit at a cost of $4K

3) There is a possibility I'd like to buy a rental/ second home in Tucson within the next year. So, I *could* do a 1031 exchange of 2nd street rental this December and kick the can on capital gain for that property.

I'm sort of thinking that the best bet is to sell Rental in December and do 1031 exchange to a rental home in Tucson that I live in part of the year and rent out via airbnb the rest of the year?

Thanks in advance for your opinion and analysis friends! Leanne