You are required by law to take depreciation equal to the percentaqe of floor space that is "exclusive to the renter".
When you sell, you are required to recapture that depreciation and pay taxes on it *no* *matter* *what*. You can also expect you exclusion to be reduced by the percentage of floor space that was exclusive to the renter.
Now unrelated to taxes, in some states that offer a homestead exemption, if you have "any" business use of the property then your can't take the homestead exemption for each tax year there is business use. So that may be something you want to check out before applying for the exemption and later discovering the hard way that you were not entitled to it.
