If you file MFS (under court order or not), then each spouse is entitled to an exclusion of $250,000, provided that each spouse individually meets the 2 year and 5 year rule. (Owned the home for at least 2 years before the sale AND used it as your personal residence for at least 2 of the 5 years prior to the sale.) Generally, the spouses would split the gains 50/50, and I believe that a 50/50 split would be required in a community property state. In Turbotax, each spouse would report half the cost basis, half the selling price, and therefore half the gain. If the gain is less than $250,000 per spouse, then all the gain will be excluded.
Some other points:
1. If the divorce is final so that you file single or HOH on your taxes instead of MFS, the same rule applies; each ex-spouse can report half the gain under their exclusion.
2. If one spouse or ex-spouse moves out of the home and it takes more than 3 years to sell the home, the ex-spouse who moved can still use the exclusion as if they lived in the home all along, as long as the other spouse did live in the home all along and qualifies for the exclusion.
3. You still only get to use the exclusion once every 2 years. Consider a scenario where you move out of the marital home but your ex-spouse does not sell until 2023. You buy a home in 2021, then want to sell it in 2024 to move in with your new (second) spouse. You could not exclude the gain on both sales since they are too close together. This rule may not affect you if you are planning to sell as part of the divorce, but things can go awry and you never know for sure.
