IRC section 121(d)(6)

税法只是说exchange的5年内不能用Section 121 exemption，没有语言说不让convert to primary。 当然不同人对税法有不同解读可以理解。

26 U.S. Code § 121 - Exclusion of gain from sale of principal residence | U.S. Code | US Law | LII / Legal Information Institute (cornell.edu)

(10)Property acquired in like-kind exchange

If a taxpayer acquires property in an exchange with respect to which gain is not recognized (in whole or in part) to the taxpayer under subsection (a) or (b) of section 1031, subsection (a) shall not apply to the sale or exchange of such property by such taxpayer (or by any person whose basis in such property is determined, in whole or in part, by reference to the basis in the hands of such taxpayer) during the 5-year period beginning with the date of such acquisition.