2 of the last 5 rule if I didn’t own initially?

[Michael J Scanlon]

Okay so I am considering buying my house from my dad and renting out the extra bedrooms when he moves out. I have lived with him for the last 3 years.

But if he sells to me and then hypothetically someone comes to me and offers me a large amount above what I bought it for: hypothetically say I buy for $225k and 3 months later someone offers me $300k

Do I have to pay taxes on that even though I’ve lived in the house for two of the last 5? Or is it 2 of the last 5 since I took personal ownership?

[Eamonn McElroy]

Owned and used for the last 2 out of 5 years.

Note the owned and used years don't have to be concurrent.