Section 121 of the tax code is very specific as to who, how, and when you can sell a home and exclude any gain. The code states that an Individual must have owned and used the home as a “principal” residence for at least two out of the past five years. However, there are exceptions to this 2 year requirement. The code allows for a partial or reduced exclusion of capital gain if the reason for selling a home before the 24 month requirement is met because of:

• A change in employment

• Health

• Unforeseen circumstances

In order to claim a home as your primary residence you must live in the home continuously for a 24 month period. Short temporary leaves of absence for vacations or other reasons, even if the house is rented during these short absences count as time toward the 24 month requirement. ( IRS pub 523)