Investors & landlords

@maxwang - there does appear to be two different scenarios: 

 

1) the house was owned for 8 years.  For the 1st two years, part of the house was rented out. However, for the past 6 years you have lived in the home without renters.  

 

2) the house was owned for 8 years.  During some of these years, you had tenants living with you.   

 

regardless, if you review IRS publication 523,  I see no discussion of failing to meet the eligibility test because you had tenants for a period of time, even if those tenants were living with you for the months leading up to the sale.

 

there is the issue of the depreciation recapture tax but that is separate from the capital gains exclusion test.