the first house must have been used and owned for at least two years (730 days) out of the 5 years before sale as your principal residence. both of you must meet the occupancy test (for the maximum exclusion) but only one needs to meet the ownership test, the issue is do the days from March to August count. the IRS does not give much info but here is info from IRS PUB 523 home sales.
If you were ever away from home, you need to determine whether that time counts towards your residence requirement. A vacation or other short absence counts as time you lived at home (even if you rented out your home while you were gone).
