That's a tough question. I think you are going to have to consult a local tax expert about that. I suspect that there might not be any IRS guidance on how to handle it. It's going to take some research, and might require consulting a tax lawyer. The answer will probably be different depending on whether the marriage that existed at the time that the gain was postponed was ended by divorce or by the death of the spouse.
When you talk to the tax expert, don't call it "rollover gain." That will cause confusion. It's not a rollover. It's postponed gain from the sale of a home before May 7, 1997.
If your current spouse also has postponed gain, you will have to take that into consideration as well.
