There are some exceptions to the ownership and use tests.
Members of the uniformed services or Foreign Service of the United States can choose to have the 5-year period for the ownership and use tests suspended during any period in which they are serving on qualified official extended duty.
Persons with a physical or mental disability must meet the 2-year ownership test, but they can qualify for the exclusion if they meet a 1-year use test.
If your previous home was damaged and condemned, you can add the time you lived in that home to the time you lived in the home you are selling in order to meet the ownership and use tests.
There are other cases in which you may be eligible for a reduced maximum exclusion if you did not meet the ownership and use tests:
You sold your home due to a change in employment, and your new place of employment is at least 50 miles farther from your home than your former place of employment.
The primary reason you sold your home was for health reasons. The health reasons can pertain to you, your spouse, a co-owner of the home, a member of your household, or a relative.
Unforeseen circumstances, which include involuntary conversion; natural or man-made disasters; death, unemployment, or a change in employment or self-employment that leaves you unable to pay basic living expenses; divorce or legal separation; and multiple births.
Assuming you have not claimed an exclusion for a sale of another home during the past two years, the maximum exclusion ($250,000 or $500,000 if married filing jointly) is prorrated based on the lesser of the number of days you actually owned the home during the past five years, or the number of days you used the home.