To qualify for the capital gains exclusion, ownership and use must be for at least how many years?

• A. One year of the previous five years
• B. Two years of the previous five years
• C. Three years of the previous five years
• D. Four years of the previous five years

Answer: (B)

Two years of ownership and use within the five-year period ending on the sale is the requirement to qualify for the capital gains exclusion on a primary residence. The two years can be nonconsecutive, as long as they occur within that five-year window. This is the minimum you must meet; you could have more than two years and still qualify. The test item is asking for the smallest amount of time needed, so two years is the correct threshold.