you can only have one principal residence at a time.
since you are married, the law also requires both of you to occupy the house as your principal residence for 2 years.
it is entirely possible that if you do not have other substantial capital gains and qualified dividends in the year of sale, the gain on the sale of the house could be taxed at 0%
state taxes are a different matter.
what you clear on the sale may not be the gain. when people say clear, they're using talking about the cash they walk away with after paying closing costs. certain prorated expenses and paying off the mortgage. the mortgage does not figure in the gain. since you say it wasn't rented, then gain should be the selling price less closing costs less basis (acquisition costs + capital improvements made)
