capital gains tax on former personal residence duplex now pure investment.

[Kyle Hipp]

Hi BP.

I purchased my first duplex in 2006. I lived in the lower and rented out the upper until our family moved to out new home this spring 2013. While living at the duplex, I remodeled and improved a lot of the property. I was able to depreciate half of the expenses for shared space improvements and all for the upper unit. Now that I have moved out and it is purely an investment property how will that play out in the future if I sell.

1. If I sell within 3 years to still have 2 years of residency in the last 5 would there be any exclusion.

2. If I sell longer than 3 years down the road is there any way to depreciate the improvement costs I lut into the property in the unit I occupied?

I plan on keeping the property long term but I have not heard this scenario discussed and would be interested in how that works. Thanks guys.