Bought house in 2006 at $200k Became rental in 2011: Similar homes selling for $120k Ready to sell in 2018, expecting $170k
I have not taken any depreciation (maybe I should have, but that is another question)
I'd like to take the equity from this sale (perhaps $35k) and put it into a commercial-type property (aircraft hanger) at about $100k. I am thinking there may be no need for a 1031 exchange if I'm not on the hook for capital gains tax on the house, so there would be no need to commit to a 1031 type schedule. I could just park the equity in my bank account and wait for the right deal at the airport.
Any holes in this plan? Does the fact that the home has recovered some value since the time it became a rental put me on the hook for US capital gains?