The gain allocated to the OO unit will be tax free up to $250,000 if single or $500,000 if married. 

What if both of you get married and then pass away? 

@Natalie Vane I've been married for 38 years. 

If you live in the home for 24 months out of the past 5 years, you can exclude up to 250k of capital gains from your income, or 500k if married filing jointly.

Honestly I don’t even know if they’d be more or less likely to all stay through the end of a lease if they were friends, married/lovers or relatives.  

You have earned income within Georgia and will be responsible for paying state taxes on the income earned within the state.It may also be possible that when you sell the property, that the title company will require withholding done at the time of closing and remit it to the state which you can claim as withholding / tax payment when you file you Georgia non-resident state tax return.Best of luck.

The other factor here would be that, The IRS states that, to do a 1031 exchange, the taxpayer for the property you are selling has to be the same for the replacement property.  

I am married and my family size is three (me, my wife, and 3 yrs daughter).

lol we are talking the same, lets say we do some input statistic analysis ( i did it before ), so in 2009 the mortgage debt with typical husband and wife working is like 29% ; now that number is going as much as 44% in some cities. also our home price is created using auction systems, if there'e 100 houses in one zip code, the pricing discovery in created by the last 3-5 home purchasers, which indicate 95% of other folks does not necessarily able to purchase home or do mortgage with current rate.Which cause a problem, one household either need to maintain job that can continously paying the mortgage and/or the loyalty of husband and wife is a MUST LOL Having said that, to maintain 1.5 mil homes in bay area for example, husband and wife should not divorce for 30 years at least.But for 150k house in Ohio, the husband can divorce their wife anytime while maintain the mortgage payment LOLHaving said that, getting divorce is very suicidal for financial.but also creating different effect, for single guy, there's almost no way they can purchase home, unless they're cardiologist or any other high income earner LOL (this example is just for fun).In our area the home supply is coming from two sources mainly: people going retirement and want to cash out or separation in relationship LOLGetting separation is very expensive especially if you born in 1970/1980/1990s, I would even argue the moment you are married-->single thus you become the renter class again LOL

Would be something where I give the LLC partner a portion of my tax savings and no we are not married, etc.