Main home gain exclusion in consecutive years

[jw-rogers]

Taxpayer sold a home he owned jointly with spouse (home a) in 2021 that qualifies for the main home gain exclusion. Home a was rented and nonqualified use will be factored but main home gain exclusion still applies. Taxpayer and spouse are planning to sell home b, which they currently live in during 2022.They also qualify for the exclusion in 2022. 

I see a hard stop at 26 USC 121 (b) (3) (3) - Application to only 1 sale or exchange every 2 years -Subsection (a) shall not apply to any sale or exchange by the taxpayer if, during the 2-year period ending on the date of such sale or exchange, there was any other sale or exchange by the taxpayer to which subsection (a) applied.

Is my read here correct? Taxpayer has no special situation prompting the move. Taxpayer has proposed filing MFS and using the gain exclusion for himself and his spouse in different years, but I see the above referenced code as disallowing this. 

Appreciate the 2nd look.

[jeffmcpa2010]

I believe you are correct. Must be at least 2 years between sales on which you can claim the exclusion.

 I believe you can Choose which home you wish to claim the exclusion for, as it seems (without looking at the form) that the question is worded something like "Do you wish to claim the exclusion ...."

Figure which is most advantageous and claim it on that year, - or delay the 2022 sale (if the gain is a significant tax cost.)  They need to remember that in lot's of the country the Real Estate market is hot right now, and may not stay that way if they delay the 2nd sale another year, and market conditions may cost more than the tax. - Or it could keep going up, Who Knows?