and i disagree with TaxGuyBill
Reg 1.121-4(e)(1)
(e)Sales or exchanges of partial interests -
(1)Partial interests other than remainder interests -
(i)In general. Except as provided in paragraph (e)(2) of this section (relating to sales or exchanges of remainder interests), a taxpayer may apply the section 121 exclusion to gain from the sale or exchange of an interest in the taxpayer's principal residence that is less than the taxpayer's entire interest if the interest sold or exchanged includes an interest in the dwelling unit.
i don't think a garage is a dwelling unit.
