Q. Question, if we use the home as full-time personal residence for the next two years and thereafter sell it, do we get the full capital gain exclusion?
A. No.
The gain will be prorated between the residence time and the rental ( "non qualified use") time. Deprecation must still be recaptured, even in a home sale exclusion situation. The recaptured depreciation is not included as a part of the exclusion calculation.
See sample calculation at:
https://ttlc.intuit.com/questions/4472518-we-moved-into-our-rental-property-and-now-less-than-two-ye...
