TomD8
Level 15

State tax filing

Are you thinking of a partial capital gain exclusion?  Scroll down to "Does Your Home Qualify for a Partial Exclusion of Gain?" in this IRS reference for the rules:

https://www.irs.gov/publications/p523#en_US_2022_publink100073096

 

This commercial website (with which I have zero affiliation) discusses different scenarios for combining a capital gain exclusion with a 1031 exchange:

https://www.exeterco.com/article_overview_1031_121_combination

 

My advice: consult a local real estate tax attorney.

 

**Answers are correct to the best of my ability but do not constitute tax or legal advice.