reverse house hack question
Is there a way to avoid tax on the gains of a sale from a rental property that has been bought through a 1031 exchange if you convert it to a primary residence for the last 2 years before the sale? For example, let's say I purchased an 8 unit in 1999 and rented it out for 10 years. I sold it in 2009 and rolled the gains from sale of that property into a very nice duplex through a 1031 exchange. I rented both sides of the duplex for 6 years, and in 2015, I moved into one side of the duplex for 2 full years. I want to sell the duplex now in 2017 and claim it as my primary residence, as I've lived here for 2 of the last 5 years. The total gains are not more than $500k. How much tax liability, if any, am I required to pay, according to current tax law?