Federal tax law allows a married couple to exclude from income up to 500,000  in gain on the sale of their principal residence as long as they have lived in the residence at least two full years.  A partial exclusion is also available if the home is owned for less than two years, but was sold due to “unforeseen circumstances”.  In PLR 201628002 the IRS agrees that an unplanned pregnancy qualifies as an unforeseen circumstance which would allow a pro-rated exclusion based on the time lived in the home.