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We live in a duplex home where we live in one half and rent out the other half. If we live 2 1/2 years in one side, and 2 1/2 years in the other side, and then sell both, can we exclude the capital gain on both sides of the duplex?

What if we convert the duplex to condos, live in one side for 2 1/2 years and then sell it. Then, move to the other side and sell it 2 1/2 years later, can we exclude the capital gain from both sales?
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We live in a duplex home where we live in one half and rent out the other half. If we live 2 1/2 years in one side, and 2 1/2 years in the other side, and then sell both, can we exclude the capital gain on both sides of the duplex?

I don't think so. You can only use the exclusion for one sale every 2 years, and this looks like two sales to me, even though it's one piece of real estate.

What if we convert the duplex to condos, live in one side for 2 1/2 years and then sell it. Then, move to the other side and sell it 2 1/2 years later, can we exclude the capital gain from both sales?

This should work. Actually, I don't see why you couldn't convert it and sell the part you've been living in immediately, then move into the previous rental and wait out your 2 years.

Phil Marti
VITA Volunteer
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