I sold my home one year and 10 months after I bought it. I realized a nice profit. Can I exclude the gain?

Under the home sale exclusion rules, you can use part of the exclusion if you cannot meet the two-year test for owning and living in the home under certain conditions. The failure to meet the test must be the result of a change in employment, health, or unforeseen circumstances. If you fall within this safe harbor, then the exclusion is limited to the portion of the two-year period that was satisfied. The allocation is based on the exact number of days of ownership and use of the home as a principal residence.