As long as HRB guarantees to support you in any audit and to pay any penalties and late fees if they are wrong, then use them. They are flat wrong on the law, as you know from the source you quoted yourself.
There are three provisions of the exclusion rule that they are getting mixed up.
1. The taxpayer must have owned the home for at least two years.
2. The taxpayer must have lived in the home as their primary residence for at least two years of the five years previous to the sell date.
3. The taxpayer can not have used the same exclusion rule on a different home within the two years before the sell date.
Because the mother lived in the home as her primary residence, she can use the exclusion on her share of the gain. Because the son did not live in the home as his primary home for at least two of the past five years, he cannot use the exclusion rule on his share of the gain.
The exclusion rule is particular to each owner. Even in the case of a married couple, when one newlywed moves into the other spouse’s home, if they sell the home and the new spouse has lived in the home less than two years, the maximum exclusion is only $250,000 for the spouse who lived there longer, and not $500,000 for both spouses.
If you care about filing a correct tax return, you need to see a different tax preparer. If you only care about not paying penalties if you are caught, then go ahead and file an incorrect tax return with HRB, as long as they guarantee that they will pay your late fees and penalties if you are audited. (No tax preparer will pay the tax you owe if you are caught. You will always owe the tax. A legitimate preparer will pay the penalties if you follow their advice and then get audited.)
