Paying taxes on the sell of a home.

[Alan Flores Jr]

Hello. So back in late April of 2013 I closed on a duplex. I lived in one side until around May of 2015 and rented out the other side. I am in the process of selling off this property to use the equity to buy a home cash. I've read up a little on the tax law but I'm still unsure. So I stand to make about 40k after all is said and done. My question is; will I have to pay taxes on this profit? I saw the live in 2 years of the last 5 years rule but its still confusing to me. Anyone care to elaborate on the rule? Any loophole to avoid paying the taxes on this profit if I plan on using it to buy more real estate?

Thanks so much,

Alan