In 2007 I sold my first home and bought a lot with an old house for $365K. Demolished it and in it's place built a 2-family as my new primary residence.
The original plan was to keep one unit for myself and to sell the other one.
But due to the market conditions I decided instead to rent the other unit. Last year I put it back on the market and sold it. The sale closed this January.
The sale price of the unit was $720K. The cost of the entire construction (including initial acquisition), plus improvements over the years was $850K+.
The other unit remains my primary residence. The condo conversion took place just before the sale.
How do I report capital gains/losses for this sale?
Thanks.