@AmeliesUncle
I have no idea where the "3 year rule" came from (I certainly cannot find reference to that time period anywhere, like you), but the following does appear in the regulations.
§ 1.121-3(b)(6):
The circumstances giving rise to the sale or exchange occur during the period of the taxpayer's ownership and use of the property as the taxpayer's principal residence.
Since @jaxolist was using the property as a rental at the time the circumstances changed (and not as a principal residence), it would appear as if the Section 121 exclusion would not apply.
