I would tend to agree with the other CPAs typically.The 500-hour test is one of seven material participation tests used by the IRS to determine if a taxpayer is actively involved in a trade, business, or rental activity. 

Each individual owner can have their own Deferred Sales Trust™, the assets of which can be managed to each taxpayer’s own individual risk tolerance and preferences.9) Net rental income.

However, there is no way to do so without risk.The Internal Revenue Services issues three (3) Private Letter Rulings (PLRs) that allowed the taxpayers to do just this.

It will have to be a pass through/disregarded LLC to keep the tax payer the same and the 1031 valid.

(i) has not attained the age of 19 as of the close of the calendar year in which the taxable year of the taxpayer begins, or(ii) is a student who has not attained the age of 24 as of the close of such calendar year.Here, in black and white, the law specifies that the determination is made as of December 31st and applies to the entire year.

The way it works out, for 2025 if your taxable income plus any long-term capital gains amounts total up to less than $126,700 (assuming married filing jointly standard deduction of $30,000 plus the 0% LTCG tax bracket of $96,700) right now the capital gains tax rate is 0%.

So if I understand this correctly, by qualifying to extend the 5 year rule to 10 yrs, $250k if single or $500k if married of proceeds from this sale would be exempt from capital gains? 

Credit, jobs, income, age, married, plans for future all this matters.

I’m a 28 year old married man with a 3 week old son.

In my experience, a large percentage of them are fully functional adults that refuse to take personal responsibility for their lives, which is why they are receiving free rent from taxpayers instead of working for a living.