You can claim the exclusion if you own and use the home as your main home for at least 2 years during the 5-year period ending on the date of sale. (The destruction or involuntary conversion of your home is also treated as the sale of your home). You may claim this exclusion only once in any 2-year period.
If you don't meet the 2-year requirement, you may be eligible to claim a reduced exclusion if you sell your home because of an "unforeseen circumstance," such as a change in employment or a divorce. A loss on the sale of your home, however, isn't tax deductible.
If you have more than one property, to determine which home is your main home, you'll need to consider other factors such as your place of employment, your mailing and billing address, and your voter registration. Your "main home", meaning the property you live in, can be any of the following:
- mobile home
- cooperative apartment