If the gain is less than the depreciation taken then you don't have any gain to exclude as the depreciation recapture that is taxable cannot be excluded. Review the form 4797 & the Sch D for this information.
Here is the general formula ...
Adjusted basis = Original Cost + improvements + cost to purchase and sell
Sales price - adjusted basis = profit or loss
Profit - depreciation taken = capital gain which may be excluded
Depreciation taken cannot be excluded and that portion of the profit must be recaptured at a rate no more than 25%.
