Client purchased duplex rental property in 2016 (property #1).  Half was used as personal property and half used as rental.  In 2021, client moved out of first property, made it 100% rental and purchased another duplex (property #2) which became their primary residence (similarly 50% rented).  In 2023, property #1 was sold – an exclusion was taken at 50% since it was primary residence for two of the five years prior to sale (2019 and 2020).  In 2024, Property #2 was sold which they considered primary (50%) since purchasing in 2021.  Is this second property sale eligible for gain exclusion on the personal portion?  Or would the two year limit apply?

Other factors –They sold property #2 and moved over 1,200 miles away and bought another property (not a rental).  individual retired from the military in 2023 and had up to one year from the date retired to use government -paid move.  Would any of these other factors be considered as an exception to the two-year limitation?