As I recall it wasn't an exemption as such. It granted "empty nesters" a six month window to reinvest sale proceeds in a smaller house (build or buy) with out applying capital gains. I think it was a once in a lifetime deal to allow seniors to trade down to smaller digs.
Most State laws followed the Federal model. Wisconsin did not, if you bought or rebuilt in Wisconsin w/in six months you got a pass. If you bought or rebuilt out of state Wisconsin hit you up for the Capital Gains, and Federal rules did not. I know a guy who fought it all the way to the State Supreme Court and lost.
That was then, it may not be the case today, check with a tax preparer you trust before proceeding.
Regards & best of luck,
GtG
Very unlikely that he will be able to trade down. He is incapable of living alone and the plan is for him to continue living in the nursing home.