I thought that was correct from reading the IRS documentation as well, but Turbo Tax said she wasn't eligible for the exclusion which seems to be a defect. It wasn't even going to allow a $250,000 exclusion! I went to the HomeSalesWks form and clicked "Y" to part II question 9, which asks, "Do you wish to use the available main home sales excl. for sales after 5/6/1997?" and then she was eligible for the exclusion. Somehow the "EasyStep" method in Turbo Tax is not selecting that even though I am certain that I put in all of the correct information. I don't know how to report this, so I'm commenting here.
