Basically on the old house you sold, you must recapture all depreciation taken on the home office and pay tax on it. That recaptured depreciation is *NOT* exempt from being taxed, even if you qualify for the capital gains tax exclusion. No matter what, you *WILL* pay tax on that recaptured depreciation.
When reporting the home sale you will be asked something akin to "did you have any business use" of the home during the time you owned it. You will of course, answer this yes and then it will work you through the depreciation recapture. So when closing the old home office, pay attention to detail and write down all the depreciation numbers, because you *WILL* need them when reporting the sale.
