@cuantoes let me throw in some examples
Say Spouse A and Spouse B each own a home that they have each lived in for over 2 years. During the tax year they marry and Spouse A moves into Spouse B's home.
They decide to sell Spouse A's home (immaterial whether they sold the home prior to or after the marriage date - what is critical is they file Jointly in the tax year of the sale). There would be a $250,000 exclusion; as it would be deemed that both spouses OWNED the home for at least 2 of the last 5 years, BUT only Spouse A could meet the two of the last 5 year residency test. So only a $250,000 exclusion and not a $500,000 exclusion.
Now they decide to sell House B.
There is certainly a $250,000 exclusion as Spouse B owned and lived in the home for 2 of the last 5 years.
Spouse A meets the ownership test be virtue of filing Joint with Spouse B.
But for Spouse A to qualify for a $250,000 exclusion, Spouse A must be able to demonstrate residing in House B for at least 2 of the last 5 years AND the sale date has to be at least two years after the sale date of House A (because you can only use one exclusion every two years).
