How long do you have to live in a US house. - income

My question is: US-specific
QUESTION: My husband and I purchased a home (primary residence) in July of
2003 in California. Are we exempt from paying capital gains if we sell our
home 4 months before our two year aniverssay on the purcahse.  I heard we
have to live in our home for two years before we sell the home or we have to
pay capital gains and a I also hear that we are exempt from paying capital
gains because it is our primary residence.  Which is it?
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david ingram replies:
You have to live in the home for a full two years to claim the "up to"
$250,000 each tax free unless serious outside circumstances require the
sale.
An outside circumstance might be:
*	serious injury or illness
*	a divorce
*	job loss
*	job transfer
*	birth of quintuplets
Winning a lottery or inheriting money or just wanting something larger would
not be a reason.
"IF" you have a good reason, the $250,000 gets prorated by the actual number
of "months" you lived in it.  i.e. 20 months would be 20/24 x's $250,000
=$208,333.33 each if there is more than one owner.
====================
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