@maxwang wrote:
I rented the house i purchased for two years, then I moved in as my primary residence.
No, you can't exclude all of the gain. It will be prorated based on the amount of time it was your Principal Residence compared to the total time that you owned it.
So if you owned it for 8 years and use it as your Principal Residence for 6 years, you can exclude 6/8ths of the profit. You will have a taxable gain on the other 2/8ths, plus tax on the gain due to depreciation (the actual calculation uses days).
[Edited for clarity]
