Selling duplex that was formerly my primary residence: does capital loss carryover apply?We own a duplex in WA state. We purchased in 2006, totally renovated both units, lived in 1 as our primary residence and rented out the other. We relocated out of state in 2010 and now rent out both units. My question is about tax implications of selling. We have a potential buyer for the duplex, but would be selling at a loss and need to know if the capital loss carryover on our tax returns would apply to both units or not. I know it would apply for the rental unit but I'm not sure how the unit we lived in would be classified. From an IRS perspective, is the unit we lived in considered a primary residence under the 2 of the last 5 years capital gains exclusion? Or did it become an investment property as soon as we moved out? If it will be considered a primary residence, should we hold on to the property and postpone selling it until the 2 of 5 rule has expired for us? If we are selling at a loss, we want to be able to claim the capital loss carryover for both units.Thanks for any guidance.June 24 2012 - US00YesReport a ProblemProblemSelect oneOffensive contentIrrelevant contentSpam (pure self-promotion)OtherDetailsYour emailPlease enter a valid email address.Submit CancelContent flaggedWe will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.We're sorry. This service is temporarily unavailable. Please come back later and try again.