That is correct, you will meet the IRS rules to exclude some to the gain on the sale of the property.
This will take some work on your part to calculate but the instructions are here with worksheets.
In a nutshell you will need to:
Figure your overall gain on the sale of the property
Figure out the taxable gain on the sale of the property. This is where you allocate personal home and rental use.
Figure out what portion of the gain is taxable as ordinary income and capital gain income.
This link is for IRS Pub 523 Selling Your Home has the necessary worksheets and instructions to figure this out.
<a rel="nofollow" target="_blank" href="
https://www.irs.gov/pub/irs-pdf/p523.pdf">https://www.irs.gov/pub/irs-pdf/p523.pdf</a>
