Hi @Anonymous_,
My issue is that this was a sale of my main home that had a rented bedroom, not a rental property to be sure. The link you provided explicitly pertains to rental property and I'm not confident my situation fits it. Publication 523 even calls out exceptions for business or rental use that don't affect gain/loss calculations:
"If the space you used for business of rental purposes was within the living area of the home, then your usage doesn't affect your gain or loss calculations. Examples of spaces within the living area include a rented spare bedroom and attic space used as a home office. In contrast, business or rental spaces not within the living area affect your gain/loss calculations. Examples of space not within the living area include a first-floor storefront with an attached residence; a rented apartment in a duplex; or a working farm with a farmhouse on the property."
From my perspective, one could make the case that since the conclusion reached by Publication 523 states "your entire gain is excludible from your income and you have no gain to report on your tax return," one could report 0 gain on the sale and there would therefore be no recapturable depreciation.
