1031 in a duplex that I live in

[Daniel Antonetti]

I know that 1031 exchanges are only for investment properties, and that you don't have to pay capitol gains on the first $250000 for your primary residence (if you're single).

So if I have lived in a duplex and rent out the other side for the last 6 years, how does that work for a 1031 exchange.

Can I take out the first $250000 as a primary residence sale, and then use a 1031 exchange on the remainder of the cap gains?

[Account Closed]

You can't exempt $250,000 of the total capital gains.  Under Section 121 you can exempt up to $250,000 of the one-half of the total capital gains that represents the one-half that is your primary residence.  You can use Section 1031 to defer all of the capital gains tax and depreciation recapture tax on the other one-half that is the investment property.  This assumes that the two units are basically identical.