I mean if you dispose of your personal residence and it meets the requirements of 121 you can exclude 250,000 of the gain, 500,000 if married filing jointly.

The other roommate can't just bail and tell you tough luck if they are jointly responsible for the lease.You will have to move forward with whatever your process is.

Lease states that all parties are jointly and severally responsible for the obligations under the lease, and that any refunds following termination of the lease will be made out to all parties on the lease. 

Form a joint venture and use private funds.

My spouse and I are the only members, and we file a joint return.

Also, you can treat an LLC as a "disregarded entity" for tax purposes meaning you can file it on you personal tax return as long as it is a single member LLC or just you and your spouse depending on your state laws regarding spousal joint property rights.Hope this helps,Good luck!  

The percentage of the property allocated as your primary residence would still be treated as a primary residence upon sale, which would allow you to utilize the Section 121 universal exclusion of capital gains of $250,000 for an individual or $500,000 for a married couple filing jointly.

Does anyone have experience with structuring a joint venture or partnership in the Scranton/WB area?

However, if you have used it as your primary residence for at least 2 out of the last 5 years, you would be eligible for the Section 121 Universal Exclusion of gain for primary residence of up to $250K for an individual or $500K for a married couple filing jointly.

For example, in 2018 a married couple filing jointly can have taxable income (after deductions) between $77,400 and $165,000 and remain within the 22% tax bracket.