"to qualify for the capital gain exclusion on a home sale, the seller must have resided in the residence for of the previous 5 years."

The correc answer is 2.

Explanation:

If you have a gain on the sale of your principal residence, you may qualify to exclude up to $ 250,000 of that gain from your income, if you have owned and used your home as your principal residence, for a total period of at least two years. five years before its sale date. You may qualify to exclude up to $ 500,000 of that gain, if you file a joint return with your spouse. There are several limitations and exceptions to those general rules.

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