How much tax will you owe when you sell a duplex you live in near Plummer Elementary in North Hills 91343 in 2027?
It depends on your purchase price, improvements, depreciation history and other income, so only a CPA can give you a real number. What you can know now is how the pieces work: the unit you live in may qualify for the home sale exclusion, the rental unit generally does not, and depreciation you claimed on the rental is taxed separately.
This post is general information, not tax or legal advice. Please consult a CPA and an attorney before you make decisions about your sale.
Why This Matters Now for North Hills Duplex Owners
Redfin data for ZIP 91343 for the three months ending September 2026 shows a median sale price of $832,255, down 5.3% from a year earlier. Homes sold in a median of 52 days, compared to 40 days a year earlier, and 31.4% of homes had a price drop.
In a slower market, it helps to understand your likely tax picture before you list, not after closing. I am Seann Brown, a REALTOR® with Park Regency Realty. I have closed 40 transactions and have over 55 five star reviews across Google, Zillow and Yelp, and every seller I work with gets a seller net sheet before listing.
How a Duplex Gets Split for Tax Purposes
When you live in one unit of a duplex and rent the other, the IRS generally treats the sale as two parts: the part that was your home and the part that was a rental. IRS Publication 523 explains how to allocate the basis and sale price between them.
Your Unit and the Home Sale Exclusion
Under Publication 523, you may be able to exclude up to $250,000 of gain ($500,000 for most married couples filing jointly) on the part of the property that was your home, if you owned and lived in it for at least 2 of the 5 years before the sale. Your CPA will confirm whether you qualify and how much of the gain belongs to your unit.
Your Rental Unit
The home sale exclusion does not apply to the rental unit when it is a separate dwelling unit, as it is in a duplex. Gain on that part is generally taxable.
Depreciation Recapture on the Rental Unit
If you claimed depreciation on the rental unit, the part of your gain that comes from that depreciation is generally taxed as unrecaptured Section 1250 gain at a maximum federal rate of 25%, which can be higher than the usual 15% or 20% long term capital gains rate. IRS Publication 527 covers depreciation on residential rental property. Gather the tax returns that show depreciation so your CPA can calculate it.
Other Taxes to Ask Your CPA About
- California income tax. California does not have a lower rate for long term capital gains, so the taxable gain is taxed at your regular state rate.
- Net Investment Income Tax. A 3.8% federal tax can apply to investment income, including taxable gain on a rental, when modified adjusted gross income is above $200,000 for single filers. Gain you exclude as a home sale is not included.
- Withholding at closing. California generally requires escrow to withhold on many real estate sales, reported on Form 593. The standard amount is 3 1/3% of the sales price, or you can elect an alternative based on the gain. Exemptions can apply, including for the part that was your principal residence. Escrow and your CPA can tell you what applies.
Ways to Lower or Plan for the Tax
Each of these is worth discussing with your CPA:
- Document capital improvements. Roofs, plumbing, electrical, HVAC and remodels can increase your basis and reduce your taxable gain. Gather receipts and closing documents now.
- 1031 exchange on the rental part. The rental portion may qualify to defer tax if you buy a replacement investment property. If you are not buying another rental, this may not fit.
- Installment sale. Receiving payments over time can spread some of the gain across tax years, but it has rules and risks, and depreciation recapture can be treated differently.
- Timing. Your other income in the year of sale affects which brackets apply.
What Happens to Your Tenants When You Sell
A 1958 duplex is likely covered by the Los Angeles Rent Stabilization Ordinance, because LAHD says the RSO generally applies to rental units built on or before October 1, 1978, including duplexes. You can check your property on ZIMAS under the Housing tab. In general, a sale does not end a tenancy, so a buyer usually takes the property with the tenants in place.
If tenants need to move out for a no fault reason, LAHD rules require relocation assistance, and the amounts are set in LAHD’s bulletin. Voluntary buyout agreements also have LAHD disclosure requirements. Check LAHD’s RSO information and talk with a landlord tenant attorney before you decide.
A tenant I helped through a move left this review on Google: “Seann Brown has the wealth of knowledge that was needed when I had to move out and find a new place. Also for the record Seann is a down to earth, easy going, with good since of humor, and he knows the business he’s in. As far as I’m concerned these are great traits to have.”
Frequently Asked Questions
Do I owe capital gains tax on the unit I live in if I sell my duplex?
Possibly not on all of it. Under IRS Publication 523, you may be able to exclude up to $250,000 of gain ($500,000 for most married couples filing jointly) on the part that was your home if you meet the ownership and use tests. Your CPA will confirm the allocation.
What is the federal rate on depreciation recapture for a rental unit?
Gain from depreciation on residential rental property is generally taxed as unrecaptured Section 1250 gain at a maximum federal rate of 25%.
Does California give a lower rate on long term capital gains?
No. California taxes capital gains at the same rates as other income.
How much does California withhold at closing?
The standard Form 593 withholding is 3 1/3% of the sales price, or an alternative amount based on the gain. Exemptions can apply, including for the part that was your principal residence.
Can I do a 1031 exchange on just the rental half of my duplex?
The rental portion may qualify if you buy a replacement investment property. Your CPA or a qualified intermediary can tell you whether it fits your plans.
Will my tenants lose their rights when I sell?
In general, no. A sale does not end the tenancy, and RSO protections continue to apply to covered units. Check with LAHD or a landlord tenant attorney about your situation.
What is the current median sale price in North Hills 91343?
Redfin reports a median sale price of $832,255 in ZIP 91343 for the three months ending September 2026, down 5.3% from a year earlier, with a median of 52 days on market.
The Bottom Line
Selling a duplex you live in is a real estate sale, a tax event and a tenant event at the same time. Talk with a CPA early so you know your likely tax bill before you list, and talk with an attorney about your tenants.
I sold 9419 Haskell Ave in North Hills for $886,000 on an $875,000 list price, and 9320 Swinton Ave for $805,000 on a $799,900 list price. Every seller I work with gets my 18 point 4 phase listing plan in writing and a seller net sheet that includes estimated closing costs and withholding. If you own a duplex in North Hills 91343 and are thinking about 2027, call or text me, Seann Brown, at 818.960.3501.
