Is it a federal law (perhaps a federal code that I can look up)?

@Jerome Morelos Definitely look into your state laws...I know here in MA I am not allowed to charge tenants for water UNLESS it is sub-metered correctly.I am also required to provide heating no matter what during "heating season" even though the heaters are also separate for each unit.I would also suggest taking a look at other listings in your area to see what common practice is.Best of luck!

I would talk to your CPA about if you would qualify.Keep in mind though that the tax reform bill Congress is currently considering changes the timing requirements to 5 out of the past 8 years rather than 2 out of the past 5 years, so if that bill becomes law you may not qualify for the exclusion anyways.

While it is not against the tax law to exchange after only 3 months from a previous exchange, a lot of intermediaries will not want to touch it, due to the IRS challenge risk.Ditto for the former residence. 2 months are probably not enough to establish investment intent which is a requirement for the exchange.

FHA borrowers who want to initiate a loan assumption should discuss their needs with the loan officer to see what may be required in terms of lender standards, state law, and other factors.

It also limits how often you can claim this exclusion to once every 5 years (instead of 2).However, it is politics so who knows if the tax reform bill will become law.

I would wait till next year, as assuming the tax law and your situation are the same, whatever the tax benefit you get this year, you would get next year also.

@Jay JonesWhat does the tenancy law in the jurisdiction and your lease have to say on the matter.  

I would also get up to speed on the landlord tenant laws and write as much of the maintenance into the buyers lease as your allowed to per Washington State guidelines.

That may give you enough capital for down payments on investment properties.3) If you have been living in the house for more than 2 years and owned it that entire time (and do this before the tax reform bill in Congress potentially becomes law), you can exclude up to $250,000 in gain from taxes ($500k if MFJ).