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Tax Treatment of Investment Property if Owner Occupied?

For about 3 year I have an investment property purchased under 1031 exchange. Next year I plan to make that as my primary residence (because it very near my job). If after living there for 2 years, I sell it, how will it be treated for taxation purpose?

Public Comments

1. Under the changes made in December, since you will have lived in it 2 of the last 5 year years, you will be eligible for only 40% of the $250,000 exclusion. And don't forget that the exclusion only applies to regular gain. 1250 gain cannot be excluded and is paid back at ordinary tax rates, capping at 25%.