Exemptions on sale of a jointly owned/occupied primary residence

[Karim Hafez]

I have read through read Voss v. CIR, the memorandum for Inspections of Sections 469(g) and 121, scoured the web, and have attempted to find an attorney/CPA with no luck to help me answer a the question stated below:

I am selling a home (currently in escrow) in the Bay Area that I have owned as my primary residence jointly with my parents since 2004 (not purchased in a like-kind 1031 exchange). We all meet the ownership and primary residence eligibility tests. I estimate that our net gain will fall in between $700K-$762K. I am curious if anyone has experienced a sale with gains in excess of $500K with joint owners. 

I am specifically looking to understand if I can take the $250K exemption while my parents take a simultaneous $500K exemption. If you know of a CPA or Attorney in CA that would be helpful in the matter I am more than happy to consult with them.

Section 121 of the IRS code has examples but does not provide examples where the gain is in excess of $500K, so I am trying to get a clear understanding of how to manage the distribution of the gain. Here is a link to the best supporting material I have been able to find.

https://www.thetaxadviser.com/issues/2017/apr/tax-issues-nontraditional-households.html#fn_78

Thank you in advance for any help/insight.