offsetting LT gain on sale of main home with capital losses?

True and the instructions for Schedule D say the same thing.

Example 2 is the case where the gain on your main home is greater than the $500K exclusion, so that you are left with a reportable "Capital Gain" not a capital loss on personal use property.

Also true. Once you report your gain on the sale of your home, the other capital losses (not personal use losses) can offset it.

Yes.

I don't see a conflicting observation. The law says you can't deduct a capital loss on personal use property. In the example, there is no loss on personal use property. There is only a gain.

Yes.

Correct. section 121 allows you to exlcude gain on your main home, but the exclusion cannot exceed gain on the home.

This is what OP missed -- you cannot claim a loss on personal use property, but under Sec 121 you can exclude up to 250,000/500,000 (or a lesser amount if required to pro rate the exclusion) of the qualified gain on your main home.

The exclusion amount does not reduce gains on other property.

Understand the difference between Sec 121 exclusion of main home gain, which applies to an offset only from main home gain, from cap losses which applies to other capital gains as well.

Not any change.

Doh! LOL at myself. This is stupid case of looking for and seeing what I did not want to find. I completely misread the Tax Tip statement in ways that I cannot image even now. Thanks for pointing out my mistake.