My mother is currently living with us,do to a fall. She wants to sell her house and move into assistant living, does she have to pay capital gains from the sale of her house? She is 78 years old

She may be able to exclude a portion of the gain. (Up to $250,000.) You should begin gathering documentation relevant to the purchase of the house and any improvements for your tax preparer.

Walt is correct. She will definitely qualify for an exclusion of $250,000 on the profit in selling the house. If ALL of the capital gains is below $250,000, she does not even have to report the sale of the house.

It is my understanding that she has to live in the house for 2 or more year for an exlusion

Living in the house for two out of the past FIVE years is normally a requirement, but her move is for medical reasons, which can qualify for a waiver of that rule.