<prompt> Human: Our tax advisor is saying because we rented out a basement room on Airbnb for 4 out of the 5 years we owned our house. Were now liable to pay tax on a portion of our capital gains from the sale of our house, because its technically a business sale. Does anyone have experience with this? More detail:We registered our Airbnb as a business with the city of SF, per the citys rules. We deemed it 28 of our property. Rented 250 days a year 75 a night Roughly 18k a year.We filed taxes on the income, depreciation etc. When we sold our house this year we made a bit less than the 500k allowed for a married couple. We put the majority of it into a new house. But now our tax accountant is saying were liable to pay tax on 28 of that gain because of our Airbnb business. Is there anyway around this?!! Also how is this not more widely publicized? I think were going to end up paying back all the depreciation and a chunk of what we earned from Airbnb over the 4 years... Any advice very welcome.  <response>: Short answer: your tax advisor is correct. When you have mixed use property like you described, only the portion of the gain allocated to your personal residence qualifies for the exclusion. The calculations arent necessarily that straight forward, but thats the big picture. You also have to pay higher tax rates on the depreciation recapture from the rental portion. Regarding your comment about this info not being better publicized - its out there, but, unless you enjoy reading tax articles in your free time, it likely never came up. This is why you should always consult with your tax advisor before you make big financial decisions. Edit: a word 