Former Primary, Now Rental, With a HELOC Looking to sell. (1031)?

[Grant Francke]

Wondering if you guys could help me think through this.  

A former primary residence (9 years) is now a rental. The original mortgage is paid off, but there was a HELOC taken out on the property to fund downpayment on more rental properties. If the former primary residence were to sell how would the owners best position them self. Could they use a 1031? or would it fall under the 250K home sales tax exclusion?

Thanks in advance!

[Frank Jiang]

The tax exclusion is if you've lived in the property in any 2 of the last 5 years, so no you would not qualify for this deduction.

1031 is available as an option.

You can move back in to regain the tax exclusion.

You can try to offset any potential gain through losses elsewhere in your portfolio.

Best of luck!