So there are a few ways to look at this, the 1st question is are you sure your renovation’s will double the property value, most renovations on primary residences, your lucky to get 60-70% of the dollar cost back out upon sale, so really nail down your comps, than you have basically a math problem if your rate on your primary goes up how long if ever before that extra payment is more than 400k in taxes, that’s just a simple calculation to help you decide, but I suspect you actually have a different question here, from a purely financial perspective my guess is the best option is to do anything to avoid that tax hit, but one of the reasons to make money is to spend it on things that you enjoy, based on your overall financial picture and a subjective view of how much enjoyment you will get out of a renovated home, you should decide if you want to roll your profit into another deal or “cash-out” your winnings, I love cars and I’m willing to spend more than is fiscally smart on them because they bring me joy, there is nothing wrong with that, but i don’t think it’s a fiscally smart choice, without knowing your exact property id imagine a renovation would fall into that category, so that’s the terms I would use to decide.

The bonus here is you can write off the milage (if you deduct by the mileage method) for your travel to pick up your mail.

Your 4th bedroom is a plus but the 3rd bath is the real bonus.

Equity is a bonus. 

Full disclosure I am a paying client (and a VERY happy one) and get a bonus when new agents sign on after I recruit them.

Those were bonuses that weren't part of my consideration at the beginning.  

Also worth noting which areas are appreciating in value, since you’ll have to have an exit plan eventually and the extra value add is a great bonus. 

I landed a duplex with the tenant side as a 3/1 and our side is a 3/3 with a bonus room tiny office.

I'm looking to BRRRR this property, and hoping to be able to provide a bonus out of the refinance portion.

If a cost segregation study was performed, would we need to start taking bonus in 2021 when the property was a LTR, making the loss passive?