The capital gains exclusion only applies to someone who is both an owner and uses the home as their main residence.
It might be possible for your brother to give you his half of the house via a quit claim deed, so that you would be the only owner at the time of the sale and you would be responsible for all of the capital gains tax. You could then apply your partial exclusion limit to the gain. Whether this would be appropriate would depend in part on whether your brother provided any of the funds to purchase the home in the first place or if he was only listed as an owner for purposes of qualifying for a mortgage. I would suggest that you see a real estate attorney before you take any action, and if you have already arranged to use an attorney for the sale, bring this up with them well in advance.
