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It wouldn't get rid of all the gain (because of the recent changes in the law addressing periods of nonresidence), but it would get rid of most of it.

Isn't the exemption prorated? If they live in it 3 years starting sometime this year, would they not have at least 2/3 of the $500,000 exemption? Sufficient to cover the $100,000 gain.


P.S. We have converted a rental into primary residence. I would not go through this for the taxes on $100,000.
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