Can I still use my Sec. 121 gain exclusion if I rent out my home?
A: No, you can still preserve your exclusion assuming you have used the property for the previous 2 years as your primary residence and that you sell the property within 36 months of changing it to a rental. The Housing and Economic Recovery Act of 2008 requires a 5-year look-back. As long as you have used the property as your primary residence for a minimum of 2 of the last 5 years, you qualify. Also, there are exemptions to the 24-month requirement for certain "unforeseen" circumstances such as military deployment, changes of employment or for health reasons.