Equity Rich - Need Advice

[Ronin Crimmons]

First, thank you for any advice or recommendations.  We would like to buy a bigger house and move up.

I am equity rich on my primary residence.  Own free and clear with value estimate of 2.3 mil.  My cost basis is 1.1 mil.  If I sell, after realtor's fees and homeowner's exemption (500K), I would owe tax on 685K or almost 200k.  The thought of giving 200k to the government makes me sick.

Any recommendations to avoid this?  It appears my options are:

1. Keep and rent out, use new rent to help pay newer larger mortgage - thus expanding my real estate portfolio and then 1031 after a couple years.

2. Sell and just pay the tax and consider myself fortunate to be in this situation.

Anything else I am missing?  Thank you in advance