@AmeliesUncle thank you so much for the information. I had a follow up question for you or anyone else that may know the answer. I qualify for section 121 capital gains exclusion and also have a PAL since the property was both a rental (2006-2017) and primary residence. (2003-2006, 2017-2020).
If I show the transaction as a “Sale of Home” under 121, then include the depreciation recapture can I still release my PAL? Is this considered a “fully taxable transaction”, which is a requirement for recognizing the PAL? You said” If it was converted to a personal residence, you do NOT report it in the "Sale of Business Property" section. You report it as the "Sale of Home".” Therefore I am working through if it makes more sense to report the sale as a “Sale of Home” with depreciation recapture or “Sale of Business Property” with a capital gain since it has a PAL that I want to recognize. Thank you for for assistance! I found this in regards to the home sale under section 121 and the PAL but want to be sure I interpret it correctly. Does it mean I can release the PAL when the section 121 sale has excluded capital gains? https://www.google.com/amp/s/www.taxwarriors.com/blog/bid/203125/pal-from-home-converted-to-rental-d...
