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I don't think there is a definitive answer to your question. It's all based on facts and circumstances. You may want to read the Webert, T.C. Memo. 2022-32. The link below is an article from Tax Adviser on that case.
Dispute remains over whether couple sold house due to poor health
If you want to claim the Section 121 $250,000 exclusion, I suggest you disclose your fact and circumstance on a disclosure form 8275 documenting your reasoning that you believe you qualify. Why a July 2026 sale date? If you want a definitive answer, get a Letter Ruling from the IRS.
Code revenue procedures regulations letter rulings | Internal Revenue Service
‎September 26, 2025
4:24 PM