Would that sale allow me to exclude most of the gains from the capital gains rate on a prorated basis?

More weight will be given first to the type of property that is secured and then the purpose or use of that property.The Act is pretty clear about the subject property covered, being a residential 1-4 SFD.The Act is also clear that any financing scheme that even appears to be used so as to circumvent the intent of the Act will be subject to the Act.The Act excludes commercial loans.

Contracts prior to that date are excluded.

Even if you move back into the property for two more years (not just one) to reestablish your eligibility for the capital gains exclusion before you sell, the tax on unrecaptured depreciation will still be due.The question you may not have known to ask, is how much of your gain due to appreciation can be excluded if you convert the property to your primary residence for two more years, then sell.

The mortgage payment will be around $3,000 excluding taxes and insurance.

@Michael Gee I understand a 16 page document is quite lengthy and you may not be able to omit every paragraph that doesn't apply(2 out of 5 sentences may apply) but if you can make it a 12 page doc by excluding those paragraphs that are absolutely inapplicable that may help.

The tenants pay all utilities excluding water.

A criteria for what to look for would be very helpful, i.e time of delinquency, including or excluding llc, delinquency amount, etc, etc.

Soas you see you get a tax break for holding longer.Regarding other questions, if you have occupied a property 2 out of the last 5 years you can sell and exclude any taxable gain of 250k or if married up to 500k in tax free gains.Take a look at a 1031 exchange this will allow you to DEFER your taxable gaiin on a property. there are quite a bit of rules and regulations to follow to qualify for this exchange.

Ballpark cost of construction would be about $275-$325/sf including soft costs but excluding land cost.