Selling my rental. Have questions about the taxes!

[Vincent Herrera]

Hi there, I'm fixing to sell my single family rental soon. I bought it with an FHA loan, lived in it one year and rented it there next year. I know if you own the house at least 2 years and sell it you don't have to pay taxes but what if I had a tenant in it one year? Does that matter? Any help is appreciated. Thanks!

[Liam Kinsolving]

"In general, to qualify for the Section 121 exclusion, you must meet both the ownership test and the use test. You're eligible for the exclusion if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its date of sale. You can meet the ownership and use tests during different 2-year periods. However, you must meet both tests during the 5-year period ending on the date of the sale. Generally, you're not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home. " 

The above is directly from the IRS website. It sounds like you only used the property as your main home for 1 year and therefore wouldn't meet the criteria for the exclusion.