San Francisco condo conversion tax implications

[Zachary P.]

I bought the building for 1.1 million and hoping to sell the smaller unit for around 700k. If I do what are the tax implications of this?

Since it is less than the total cost of the building will the proceeds not be taxed? 

If it will be taxed can I just do 1031 exchange and buy a property of 700k to avoid capital gains?

Can I just pay off the mortgage to avoid taxes?

Thank you for your help. 

Happy to answer any questions anyone has about tenant buyouts and San Francisco condo conversion.