Selling a Rental after being rebuilt (fire)

[William Huston]

I have an interesting situation on my hand, one of my rentals (Townhouse). Nearly half of the complex was burned down from a fire about a year ago. The insurance company is going to rebuild all the units due to the amount of damage, but there has been some hold ups with the county due to permitting, changes in codes and such that has delayed the rebuild process greatly. Its been nearly a year now and they are just now getting approval to demolish the units and start the rebuilding, telling me its about a year out on the finish of the rebuilding.. 

So once the property is finally rebuilt, i would be unable to rent said property for 2 years.. I currently technically dont have a primary residence as im renting right now, if i was to choose to sell this property. Would it be classified as selling a rental or not? Im a single person...

I have never 1031 exchanged anything before, so not sure if id have to do this to buy another without owing a ton of taxes or could i sell it and just be safe of paying capital gains with the sale being under the 250k for single limit?

Property value prior to fire was 139k, i owe 32k on the property.. so it would be around a 100k+ gain

[Dave Foster]

@Kyle Kadish, Good thought.  I had the same but it looks like more than one unit was affected so the complexes insurance is covering and they'll never allow a full loss of one unit.