Capital Gains - Best ways to reduce

[Dan Stelmach]

Hi There,

This is my first post so thank you to anyone that can provide feedback!

I recently bought my first residential property (a condo) in the burbs just north of Chicago. I bought it off market at a great deal with a conventional mortgage as a primary residence with the plans to rent it after the 12 month period has passed so I can legally rent it. I purchased the unit for 250K and I put about 25K into the place.

The rents in the area for these type of units go for around 3K, maybe a bit more, leaving me about $400+ a month in profit after the mortgage and HOA. This isn't including other expenses I know but I was planning to self manage the property and hope rates continue to go down so I could refi in the future and gain more margin in rental income.

After further analysis and speaking with a friend thats a real estate agent I may want to shift my original plan and sell it. They shared I could easily sell this unit for 400K+ leaving a sizable gain in the short term.

That being said I would face some significant capital gains and I was wondering if I had any options to avoid these. So I had a few questions to see if any of you had a similar experience and what you all have done/learned.

First, besides what I put into the unit (25K) is there anything else I can write off?

Is there a way to put this into a 1031 if its considered my Primary residence? Even if I 1031into an actual investment property?

Would you still hold if you had such a sizable opportunity? I feel the value of this condo is at its peak considering the market.

Are there any legal exceptions for the 121 home sales exclusion if I buy another primary residence shortly after the sale to avoid tax? I'ved owned this property for 6 months.

Am I missing anything here?

Thanks!

Dan