If we sell the house within the next 6 months to a year, will we owe capital gains?=======>yes;as you can see, You must have lived in the home for a minimum of 2years out of the last 5 years immediately preceding the date of the sale, which typically means you can't use the exclusion on the sale of rental or business property. The 2 years don't have to be consecutive, however. You might live in the home for a year, rent it out for 3 years, then move back in for 12 months just prior to its sale.
The IRS figures that if you spent this much time under that roof, the home qualifies as your principal residence.
You can use this 2-out-of-5-year rule to exclude your profits each time you sell your main home. Of course, this generally means that you can claim the exclusion only once every 2 years because you much spend at least that much time in residence, but some exceptions do apply.
If you lived in your home less than 24 months, you may be able to exclude at least a portion of the gain. Say for example, If you lived in your house for less than 2years, you can exclude a part of your gain if your work location changed. This exception would apply if you started a new job or if your current employer requires you to move to a new location.
All my research says that it must have been your primary residence for 2 out of the last 5 years, but I'm getting mixed results about whether or not it has to have been owned during those 5 years.==>As mentioned above; To qualify for the $250k/$500k home sale exclusion, you must own and occupy the home as your principal residence for at least 2 years before you sell it. To qualify for the home sale exclusion, you don?t have to be living in the house at the time you sell it. Your 2years of ownership and use may occur anytime during the 5 years before the date of the sale. This means, for example, that you can move out of the house for up to 3 years and still qualify for the exclusion.