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Using 1031 exchange and 121 exclusion to minimize tax
I currently have an investment property I'm considering selling. I purchased for 250k several years ago and have received unsolicited offers of up to 400k. I am considering selling to lock in my gain and using a 1031 exchange to defer taxes and hopefully avoid state tax all together. I have questions for the experts as this will be my 1st 1031
1. The property is in Maine with a 7.15% cap gains rate. If I 1031 exchange to buy property in another state can I completely avoid the Maine state cap gains tax?
2. My wife and I have been talking about moving into bigger house if we have another child. If I buy a house that we might move into after a couple years of renting it what would my tax basis be. Please help using the numbers. If I sell my property for 400k and buy a rental for 400k via 1031 exchange, rent the property for 3 years, and then move into it for 2 years and then want to sell using 121 for 450k what would I owe?
I'm thinking I will owe cap gains tax on 2/5 of 200k profit. Is that correct?
Could I take the remaining as another 1031? What would the basis be? Could you buy another property for less than 450k and still defer taxes via 1031 on the portion that wasn't excluded via the 121 deduction or would you have to buy another property valued at 450k or higher?