depreciation recapture is only on the that allowed (what you took) or allowable (what you should have taken under the tax rules) but only for the period it was a rental (the 1 year or so) since your gain exceeds tax basis (sales price - sales costs - cost to purchase - improvemrents+ depreciation ) you pay taxes of up to 25% on the depreciation. then the home sale exclusion comes in. You seem to qualify for the full $500,000. since this is more than the remaining part of the gain you would owe no tax My answer could change if I knew about your housing situation during the 1 year it was a rental.
