Keep in mind that even if you qualify for a partial excusion, the recaptured depreciation is not included in the exclusion. You will pay taxes on the recaptured depreciation, no matter what. Being that it was a rental for only about 3 years, the recapture amount shouldn't be all that much really. But it's still included in the taxable income, and it does get added to your overall AGI, which means there is a potential that it could bump you into the next higher tax bracket.
