@Patrick Irish based on what you say, the Sec 121 Exclusion and the 1031 Exchange both seem like they'd be good options for you to defer capital gains on sale of the townhouse.Sec 121 Exclusion has 3 requirements: First, Determine whether any of the automatic disqualifications apply (acquired property through 1031 exchange in last 5 years, or subject to Expat taxes)Next, meet the ownership requirement -> you owned the home for at least 24 months (2 years) out of the last 5 years leading up to the date of sale (date of the closing)Finally, meet the residence requirement -> owned the home and used it as your residence for at least 24 months (or 730 days) of the previous 5 yearsThere is no “Wiggle Room” but there is a Sec 121 “partial exclusion” for people like you that missed the residence requirement by a few months.

A 1031 exchange, an installment sale, and a Delaware Statutory Trust (DST) are just a few.

Tough to beat this answer from @Michael PlaksYou can also check out these two recent posts that walk through Section 121 Exclusion and 1031 Exchange guidelines and strategyHow Section 121 Exclusion and 1031 Exchange works: https://www.biggerpockets.com/forums/51/topics/1195208-1031-and-sec-121-experts-want-to-sell-rental-but-tax-worried What not to do if you don't meet the requirements for Section 121 Exclusion and 1031 Exchange:  https://www.biggerpockets.com/forums/51/topics/1195383-5k-for-cap-gains-tax-opinion-quote-that-reasonable ...

I had signed up for a 3rd investment at a very early stage for another 400K thru a 1031 exchange.

Can some of the members of an LLC do their own exchange or cash out at the time of the sale of the property?

You can message me on the BP messages so we can exchange some contact info.

depends when you sell. talk to a 1031 expert. what matters is intent. if you bought it to sell for profit then yes you'll pay your normal tax rate. if it is for investment and you can prove that you can 1031 exchange

.: @Jonathan GreeneThat's exactly what I was thinking all through the crackpot initial person exchange in your thread.

well, the crash in san francisco market is precisely because of that, so many startup has receive no funding making people or young engineer has to sell their luxury condo in san francisco, a condo that used to be 800k 3 years ago is now 400-500k-ish, however the other area seems more stable even we got more bid for single family, it seems, an asset that is rich in bid and appeal to family with good school such as basic 3/1 would be just fine.... 

After commissions and everything these people took a 700-800k loss in under two years. my guess is this was bought for 1.2 mil as a 1031 exchange “to save taxes” these people got in over their heads and needed to liquidate for quick cash to cover debt on another investment.