(As AZ and your current state will fight over who gets to tax your gains with the federal government.)I have to throw most of the shade on your horrible tax guy/cpa who didn’t tell you renting it out was a $50-$100k mistake. 

During escrow converted it to a Roth and paid the taxes.

Tax liens2.

This will also allow you to avoid taxes on the sale.

Yes, do the tax exchange if you can.  

It is your first year when you get the major tax savings windfall due to cost segregation and bonus depreciation.

So if you have the property for a total of 10 years, moved in at year 8, little value or tax advantage.

There are two reasons this is a bad idea.Investing with an SDIRA (assuming it is not a Roth) will often result in paying significantly more taxes. 

Repairs made while the property is your primary residence are not deductible, but improvements can increase your cost basis, reducing future capital gains tax when you sell.

Would the federal tax liability be $140k at year 5 for the sale, with long term capital gains (ignoring any Net Investment Income Tax)?