Capital gains on former primary / current rental
It's been difficult to find answers for this specific situation, but I was curious if anyone could answer based on their experience. I'm not looking for tax advice, but just curious how capital gains are calculated when selling a property that was, for example, your primary residence for 6 years but converted to an investment property the last 1 or 2 years of ownership. If sold, do you take the calculated capital gains and only apply it to the years it has been a rental, or is the full amount taxed because of its current status? Thanks.
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If it was your primary first, as in your scenario, the capital gains would be excluded. You would still be responsible for depreciation recapture for the two rental years but the remaining gain would not be taxed.