Only that your intent must have been to hold the property for productive investment use.Selling and combining a `121 primary exemption with a 1031 exchange will give you $250K tax free and the rest of the gain including depreciation recapture will be indefinitely deferred.  

Hey All - Thank you all in advance for the help.   My parents are looking to sell their house in VA that they have owned for over 20 years.  The plan is for them to buy a house in Florida that they would live in for t...

The Committee was tasked with getting $3.5 billion in tax-exempt housing bonds out the door.

Not to make excuses (but kind of), but I'm overseas for most of this year and don't think I will have the time to be present and active enough to take advantage of the 1031 - I'm concerned I'd miss the window to purchase like properties, and it sounds like a fairly active and intensive process.However I might be able to pursue a similar option anyway, given something I discovered after my initial post: I may be eligible for a capital gains exemption due to having lived in the CA property for 2 of the last 15 years (military status extends/suspends the "2 out of 5" rule for up to 10 years). 

Honestly, for my personal situation, rent ready turn key properties is what makes the most sense given I’m a busy medical professional putting in 50-60 hour work weeks.

Question for any one who has come upon this situation for California-based landlords-We have a single property (SFH) which we run ourselves, not under an real estate investment trust, corporation, or LLC which would normally be a slam-dunk exception from California's AB1482 bill for rent cap increases and no-cause evictions.However, we built a "SFH" (on the permit) ADU in the back, which I've read can be interpreted as no longer applying as exempt from the law, but can't find specific wording in the law. 

Our plan is to demolish the house, build a new there, live in it for 2 years and then sell it and get the $500k tax exemption.

They also dole out various exemptions, none of which help investors, as essentially a bribe to avoid opposition to their spending.

FYI...On March 22, 2021, the Baltimore City Council passed legislation that mandates changes to all residential leases and impacts when late fees may be imposed.Specifically, the law, entitled “Late Fees for Past Due Rent,” provides that “a residential lease shall include a provision that the landlord may not apply late fees to the rent until the tenant is more than 10 days past due with the rent.”As drafted, the above provision is required to be included on all residential leases in Baltimore City, whether or not a late fee is actually contemplated by the lease unless a statutory exemption from the lease requirements applies, e.g., it does not apply to leases for rental units within an owner-occupied residence.If a residential landlord seeks to impose a late fee for delayed or nonpayment of rent, the lease:must include a provision that prohibits a landlord from applying a penalty fee for late payment of rent until:(i) The tenant’s payment of the rent is more than 10 days late; or(ii) The tenant has received the tenant’s regularly scheduled government benefit disbursement if the tenant has previously provided the landlord with written notice that shows the day of the month the government benefit is normally issued or mailed is later than the day on which the rent is due.The Late Fees for Past Due Rent Law, which was signed by Mayor Brandon Scott on March 31, 2021 and becomes effective on April 30, 2021, only applies prospectively to new leases and shall not have retroactive effect on leases entered into prior to April 30, 2021.

As you're changing the property type, I might involved a legal team that focuses on municipality regulation to make sure multifamily is allowed in that zoning district, the density you're planning for is allowed, and to understand the exemption process if needed.