I believe you are referring to the $500k exclusion, if married and lived in the house
For more than two years, or the $250k exclusion if single.
capital gains in excess of the above limits, based on whether married or single will
Be taxed at Long Term Capital gains rates, based on your income level.
However, do check and verify with your CPA.
If you rent the property out for more than two years the property will be treated as an income property
And you will be taxed on any and all Capital gains.
Due to a strong economy and the fact that both Apple and Google have huge expansion plans in Sunnyvale, I believe that the Santa Clara home and rents will continue to go up, due to
Higher demand for housing.
Do call if you have further questions.