I'm not sure what you mean by proceeds of $113,000. If you sell the home for $459,000 your proceeds are $459,000. Proceeds are the full selling price, not the amount of cash you walk away with. Are you subtracting the mortgage payoff in calculating "proceeds"? Paying off the mortgage is not taken into account in calculating proceeds or gain.
The potentially taxable amount is the capital gain, not the full proceeds. Your capital gain is the selling price, $459,000, minus the original purchase price, $252,000. So your capital gain is $459,000 - $252,000, which is $207,000. Paying off a mortgage does not affect the amount of capital gain. But you are still well under the $250,000 maximum exclusion for each of you.
