200k capital gain house hack turned rental. 1031 or move back in?
Keep it, move back in or 1031? I did a house hack without knowing what it was. Lived there 5 years and it's been a rental for 6, with the EXACT SAME AWESOME RENTERS from day one. (The renters now on a month to month.) The market is insane and I'm afraid it's a bubble so want to get money out of this property - approx. 250k after pay off bank put before selling fees. (I have 4 house hack rentals now, 2 primaries and a condo that I purchased for my father. All but one primary has an associated loan.)
In short, since I'm married I don't pay capital gains on a primary home so long as live in it 2 years of the last 5 and the gain is less than 500k, I think? So I could move back in for 2 years to save the 25%(???) tax on the 200k OR should I do a 1031 exchange to defer the capital gain hit? I'd like to get a multifamily with the proceeds, either way, near our second home (where prices have increased but are affordable and a stable dependable market.) I have a mortgage of about 180k on the property. It is cash flowing but not a flood of cash. So maybe you say, keep it and find another way to finance a multifamily? Move back in to save tens of thousands? 1031 to multifamily?