your wife does not have to be on the title.
period of non-qualifies use does not qualify for the exclusion IRC 121(b)(5). this means that a portion of the gain may be taxable if not used as a principal residence. period of non-qualified use is any period after 2008that the property was not used as your principal residence.
period of nonqualified use 2015-2025 = 10 years (rental)
period of ownership 2000-2030 = 30 years
depreciation to the extent of the gain must be recaptured
gain = sales price less cost reduced by depreciation allowed or allowable
non excludable gain (sale price less depreciation) times 10/30
example sales price $1,001,000, cost $275,000, depreciation, $100,000
gain $1,001,000 - ($275,000-$100,000) = $826,000
$100,000 gets reported as section 1250 recapture subject to reduction for any net short-term capital gains
non excludable gain ($826,000-$100,000) = $726,000*10/30 = $242,000
excludable gain $826,000-100000-242000= 484000
taxable gain 826000-484000=3420000 (this includes section 1250 recapture
