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Even if you sell your home now, because part of your main home was used for business purposes, the IRS requires that you treat the sale of your home as the sale of two distinct assets. The gain attributable to personal use may qualify for the exclusion for sale of your main home. The portion of the gain attributable to business use (50% for basement) is considered taxable sale of a business asset. However, if the basement was used for personal use for 2 or more of the last 5 years, that portion of the gain from sale may qualify for exclusion from income also.
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