Sale of primary to a related party

Taxpayer and spouse want to sell their primary residence to their son and take advantage of the IRC code sec 121 $500,000 exclusion of capital gain. As long as the residence is sold to the son at fair market value is section 121 allowed when it involves a related party.

Yes.

Is related party or FMV even an issue?

In order to be a valid arm's length transaction, the sale to the related party should be at FMV?
If the sale to the son is at a value less then FMV does that constitute a gift?

Part sale and part gift.

Not a section 121 issue. Wasn't that the original question?

My understanding is that a sale to the owner's S corp will also qualify.

What does that accomplish?

Not much.