Sell to LLC to avoid tax under 2/5 rule?

[Blake C.]

Question: We purchased and have lived in a home for the last 5 years as our primary residence. In that time it's value has gone up about 40%. We are about to move out and rent it. To fall under the 2 of the last 5 year rule we have 3 years to rent it and avoid paying tax on the gain. However, can I sell it to an LLC that I own within that time frame and avoid paying the tax?"

[Brandon Hall]

@Blake C. yes, however it's pairing multiple code sections and tax court cases together to form a basis for substantiation. It takes a creative CPA - and that's what people pay me to do :)