PUB 523 says "Exceptions. The following situations of business or rental usage don’t affect your gain or loss calculations.
•Space within the living area. If the space you used for business or rental purposes was within the living area of the home, then your usage doesn't affect your gain or loss calculations. Examples of spaces within the living area include a rented spare bedroom and at-tic space used as a home office. In contrast, business or rental spaces not within the living area affect your gain/loss calculations. Examples of space not within the living area include a first-floor storefront with an at-tached residence; a rented apartment in a duplex; or a working farm with a farmhouse on the property."
According to this I rented out a space within the living area. Therefore, I should qualify for the capital gain exclusions when I sell the house. Is this correct?
