1031 Exchange worth it to defer $11k tax bill?

[Charles Mangum]

I'd like to get opinions on whether or not you would do a 1031 in this situation.  I have a house I have owned for 2.5 years.  It is currently under contract and I my estimated capital gain is $40k which will result in an estimated tax bill of ~$11k.  1031 Exchange fees are ~$1k.  I have a property already lined up as a replacement. 

I'm thinking it is worth the hassle to do this but wanted to get some opinions on what you would do. 

[Bill Exeter]

@Bill Gulley

I'm not sure what the 3 of 5 years is that you are referring to. There is no 3 of 5 year requirement in the 1031 Exchange world. 

I'm going to guess that you are referred to the three (3) year window that a homeowner would have if they moved out of their home/primary residence and converted it to rental/investment property.  They have a three (3) year window from the date they move out of the property in order to take advantage of the 121 Exclusion.  If they sell after the three (3) year window, they would not qualify for the 121 Exclusion.