When the taxpayers home sale gain is completely excluded under the section 121 gain what action does the taxpayer take?

A report the transaction on schedule D by showing sales proceeds equal to the races be reports nothing to the IRS see reports the transaction on a form 4797 by showing sales proceeds equal to the base is D must attach a special statement to the tax return for the year of sale indicating taxpayer a family he likes to take advantage of the home sale gain exclusion