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Updated almost 11 years ago,

User Stats

52
Posts
8
Votes
Kenny Tan
  • Homeowner
  • Sacramento, CA
8
Votes |
52
Posts

Selling Duplex cap gain tax strategy

Kenny Tan
  • Homeowner
  • Sacramento, CA
Posted

Hello everyone.
A brief intro. I owned an identical 2x3bd floorplan duplex in Sacramento for 10 years and I have plans to sell for a modest profit when RE market gets better. I hope that would be 4-5 years from now.
To reduce my Cap Gain and other reasons, I have actually moved back to live in one side. Taking advantage of Section 121 Residence exclusion. Plus it is easier to do needed upgrades while I live in it.

My questions is regarding the use of Section 121 for the sale of the duplex. Can I move into the 2nd side after living in the 1st side for 2 years and establish primary resident status for a total of 4 years in the duplex. Then on the fifth year I will sell the duplex to minimize cap gain tax on both sides? (minimum 2 of last 5 years)
Of course depreciation recapture must still be done on both side.
Anyone that has done this please chime in. Thanks.
-Kenny

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