The FEIE allows you to exclude up to $105,900 per year as a benefit to expats.

My rent roll excluding the two units rent would have been still sufficient to cover my expenses. 

The clear looser, as suspected, was the employer 401k - excluding the amount your employer matches... to which I say take the free money.  

If you sign the contract then they didn’t exclude it then they’re on the hook.

We current finance about $1T on the margin (excluding 2020), so the idea that we can easily square this circle without someone getting short-changed is an outright fantasy.

@Brian GlasspooleIf you have the option of selling the house and excluding the gain - I would take it. 

The taxpayer's participation is more than 100 hours during the year, and no other individual (including nonowners) participates more hours than the taxpayer.It looks like this point would likely be my best bet for accomplishing what I'm looking for to reach "material participation" within my rental business. 500 hours is still 10 hours a week, given that I want my rentals to be truly passive 100 is much closer to what I expect my real time investment will be since research/acquisition activity appears to be excluded.

I made my first real estate investment roughly 5 years ago, purchasing a 2-Family as my primary residence...living in 1st Floor Unit with my wife and we renting out the 2nd Floor Unit to tenants.We're about to sell the house at a profit and I'm looking to understand what the tax implications will be.I'd read that a married couple are allowed to exclude up to $500,000 in profit from a sale of their "primary residence". 

It's interesting how they have apparently excluded landlord-tenant laws and eviction moratoriums in this.

The longer you occupy as a primary residence, more of your gain can be excluded under §121.