121 exclusion for personal residence which was then rented

[Pratish SHah]

I and my wife own a condo and have used it as our primary residence for exactly 3 years. We own the condo without any mortgage. I will be moving the condo into an LLC (a single member LLC with me being the only member) and then renting it for two years. One of the plans is to sell the condo at the end of two years if it appreciates enough. Hear are the issues.

1. Will I qualify for the 121 exclusion (and therefore wont have to pay taxes on the gains). 

2. Will transferring the property into an LLC be an issue. Will I be able to pass the ownership test of this clause of the IRS.

3. The condo is currently owned by 2 people (me and my wife) and will be transferred to a single member LLC (just me). Will this in any way affect the 121 exclusion? I am not too worried about the exclusion amount of 500,000 vs 250,000 since I dont expect my gains to be that much.

 

Thank you all in advance.

Pratish Shah

Budding real estate investor.:)