ANSWERS: 1
  • In short, you will pay capital gains tax on the side you did not live in, unless you do a 1031 exchange with the value of that rented side of the duplex and purchase another investment property within 180 days of sale of the duplex. You will need to make this "declaration" when you go into escrow on your duplex. Consider living in the currently "rented" side for 2 additional years to exclude the entire gain up to the max $$ limits (500K married, 250K single).

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