your gain is determined by selling price less cost. equity has nothing to do with the gain.
the $365k would be the selling price but you get to deduct selling costs such as title charges, brokerage commissions, etc. your cost is the $297k and you get to add any purchase costs such as title insurance, recording fees.
you could get a partial exclusion using unforeseen circumstances
one is IRS ltr rul 20601009
criminal activities in the neighborhood including assault and theft to taxpayer's son. these can not be cited as precedent, they provide an idea of what the irs believes are unforeseen circumstances,
normally I would advise seeing a tax pro in this situation, but the 2019 return is due 10/15/2020
