There are actually two separate requirements, the ownership requirement and the residence requirement. You have to satisfy both requirements in order to exclude the gain.
You have to have owned the home for at least 24 months out of the last 5 years leading up to the date of sale (ownership requirement)
AND ALSO
You have to have lived in the home as your main home for at least 24 months out of the last 5 years leading up to the date of sale (residence requirement).
In addition, there are three other tests to determine your eligibility for the exclusion. Download Publication 523 and read the "Eligibility Test" section to get the details of all 5 tests. Critter-3 and I both posted links to the Publication 523 above.
@dazimi wrote:
I purchased the home two years ago. it was the primary residence for two years. Am I correct if I sell the home now, I am excluded the gain.
Yes, provided that you also satisfy the other tests. See "Eligibility Test" in Publication 523 for the details of all the requirements.
