Selling real estate without capital gains or penalty

[Brian Mahoney]

I flip properties as a side job from my full time job and have been successful at it for about 9 years. I have always wanted to learn more about capital gains and the 1031 exchange program. I always keep my houses for two years so I am free from paying any capital gains but have a question about another scenario. I sold a house in June 2018 as I owned that home for 2 years and was my primary home up until last June. I have my current house that I fixed up which is my current primary residence and rented it out for about 9 months and have took it over afterwards as my primary residence. My two years of owning the home will be met this coming May. My question is can I sell this house this year without any penalty since I sold a house last year? This is a question my realtor and I have. Hoping someone can shed some light on this. 

[Rhonda Blue]

I recommend the 1031 exchange process to investors all the time. AFter learning about this here on BP a few years ago I spoke with @Dave Foster and immediately knew that was the best option for deferring tax. I owned at the time 2 rental properties that I had originally bought as flips in St George UT and decided to rent for some extra cash flow. Then fast forward a few years when the market was high I sold and exchanged the funds into 4 other rental properties here in East TN. 

There are restrictions for timing the sale and purchase but I knew I would have no problem designating a few new investment properties in 45 days.