Bottom line answer: you do not get to deduct the loss, on the sale, because the principal use, during your ownership, was as you home. The rental period does not offset that. "Personal losses are not deductible"
"Principal use was your home" - what does this mean? I didn't live in my rental - I lived in my 2nd house (the homestead). This house no.1 was not used by me personally.
PS. Also, my mortgage for the rental was higher than the rent, so we never "gained" monthly income...
