Yes if its your primary residence. If its your primary residence then if you sell after 2 years (actually I think it is technically 2 years and 1 day) then you get to keep it ALL. No federal tax of any kind. If you sell less than 2 years, then you may still get a free-be as in no federal tax if: for certain reasons, like a new job or transfer and others.AnimalTale said:I thought it was 2 years out of 5 for capital gains? or 1031 exchange??