You need to be asking a lot more questions of your clients.  In this business, it's never a simple yes or no.

Some of the questions you should raise could include: Was it sold to a third party? Why only partial interest? How's the sale structured? Arm's length transaction? On what terms is your client allowed to stay in the property after the sale?

I'm curious how the answers to those questions would change anything - lets say the sale was an installment sale to a related party at below market value - would that change the applicability of the 121 exclusion?  Not that it is ever a bad thing to ask questions, just trying to understand what be relevant in the specific case.

I'd like to establish the legitimacy of the sale, whether it was a subdivision of the property, etc as it is just a bit unusual to sell a partial interest in the principal residence.  Even if the sale does qualify, I'd like to be able to assess and discuss any potential implication of the taxpayer staying on in the property in relation to the interest that had been sold, depending on the arrangement with the buyer.

Thanks for the comments. V helpful!