@Onguard2000 you are making this WAY too complicated.
On your current home, you are eligible for the capital gains exclusion as long as you owned and lived in it for 2 of the last 5 years. Simple. And you state you have lived in it and owned it for 3 years, so you qualify. .
So you move to your new home and have yet to sell your first home. Let's say it takes 6 months to sell the original home. You still get the exclusion because you owned and lived in it for 2 of the past 5 years. (it doesn't say it is the immediate 2 years, it is just 2 of the past 5)
So if you lived and owned the home for 3 years, and you were to move to the new home today, as long as you sold the 1st home within a year, you could still say you owned and lived in it for 2 of the past 5 years.
Now, all that means is when you go to sell the new home, you are not elgiible for the exclusion again until you have owned it and lived in it for 2 of the last 5 years. Further - you can't take the exclusion but once every two years. So even if you satisify the 2 of the last 5 rule for the new home, you wuould also have to wait until it has been 2 years (so 2.5 years in this example) from the closing of the first home until the closing of the 2nd home to qualify for the exclusion on the 2nd home. But if you plan to live in and own this new home for many years, delete this paragraph!
