Note that the residence necessities apply whether you own the house or not. If you lease a house for 2 years and then buy it, you are free to sell with the usual residence exclusion at any time. When you promote a house, you may have to pay taxes on the amount of cash you earned on the sale as capital gains. However, when you reside within the home for two of the previous five years earlier than selling, you get a really large tax exclusion — $500,000 for married joint filers, or $250,000 for single or separate filers. If …