That's why I asked the question if he would stay long enough to meet the ownership test for the newly-owned portion. He occupied the house but didn't own 100% of it.

As it is now, he can exclude up to $250,000 of his 1/3 share of the sale gain. The parents are not primary residents, only owners.

If they gift their share(s), we know that passes with their basis. That doesn't make him a 100% owner for purposes of the 2-year ownership component. That only changes the math = who reports the 2/3 gain. Now he reports all the gain and still has the same exclusion limit based on his 1/3. If the total gain is $300,000 he only excludes $100,000 before the gift or after the gift.

I found this analysis:

https://www.exeterco.com/pdfs/Multiple_Taxpayers_Exclude_Capital_Gain_under_Section_121.pdf

And this topic:

https://www.irs.gov/taxtopics/tc701

"You can meet the ownership and use tests during different 2-year periods. However, you must meet both tests during the 5-year period ending on the date of the sale."

He can be gifted or buy them out, but he's not 100% owner until 2 more years have passed. He qualifies for the exclusion then, even if he moves out now.