The present income tax rules on sale of your principal personal residence are favorable. If you occupied and owned a home for at least two of the five years before sale, the gain (profit) is excluded from taxable income, subject to some limits.For a single person, up to $250,000 of the gain can be excluded from income (and from self-employment, FICA and Medicare taxes). For a joint return, up to $500,000 of gain is not taxable.It can be done over and over. If you bought a home and, while living in it for a little more than two years, fixed …