1031 in less than a year (short term capital gains)

[Nick Frey]

Property A was owned by LLC A 50/50 me and another partner. After five years of LLC A owning Property A, I created LLC B with two extreme-minority partners (0.5% each, as a formality for lending purposes) and bought out Property A.

I used my $250k primary residence cap gains exclusion on this sale from LLC A to LLC B after having two tax years where Property A was not generating income (less than 14 rental days per year) and could be deemed a personal residence instead of investment property. Also didn't depreciate it as a business asset.

Sale price set a new cost basis for LLC B. Closing date of this sale from LLC A to LLC B was October 9, 2020.

Now Property A is going to likely be sold with closing in July or August, 2021...less than 12 months later.  The gain is going to be extremely significant, likely a 50%+ increase from the 10/9/2020 closing.

It was not a flip and was not intended as such, it was used by LLC B as a long-term rental...but now taking advantage of market conditions, re-leveraging, etc.

QUESTION: is this a 1031 candidate, or am I running the risk of an audit at least, and possibly getting hit with massive cap-gains at worst?  I'm hoping to 1031 into a larger MFH investment or self storage...but I've contemplated a good-looking OZ fund in Colorado as well.  It sounds like the OZ option might be safe since there isn't a lot of "precedent" set yet, and it's relatively flexible in its interpretation of capital gains.  But the 1031 option might be the way I'd rather go, I just don't want to find out I'm disqualified for it because of the under-365-day STCG issue...