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Investors & landlords
You will have to enter as the sale of a second home. See Where do I enter the sale of a second home?
According to the IRS, a property is considered a personal residence if the owner or certain family members use it for personal use for 14 days or 10 percent of the days it is rented out. Additionally, if the property is rented to anyone, related or unrelated, for less than fair market rate, it will be considered a personal residence. This is especially problematic for people who take the Rental Property deductions, but since you did not, there will be fewer issues with the sale.
You will be able to use the improvements you made to increase the adjusted basis which will help reduce the tax you will have to pay. If you have any other questions, please post again.
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