On page 494 of Lasser's 2006 Book in Example 2, they make the case that a person who sells their home after owning it for 5 years, and in year 4 converts the basement to a rental unit (seperate entrance, bath, and kitchen) can take Section 121 on the entire house because all of the house was used as a princpal residence for at least 2 of the 5 years before the sale. My only concern here is the prohibition against selling more than 1 home in a 2 year period. Any thoughts?
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