Thanks for your very informative answer. I'm still unsure of why I would not qualify for an exemption if I meet the move for a job (50 miles or more) exception, did not use the exclusion for any other house in the last 2 years, and have capital gains far below a pro-rated amount of the exception ($500k as I am marries and filing jointly). There must be some other aspect of the code I'm missing [or the software has a bug ;)]. I am going to check next week with the brokerage firm and title company that helped with the transaction to see if they files a 1099-S.
