Principal Residence exclusion and Depreciation Recapture

[alfaro4u]

In 2001 I purchased a 2 family home for my family as our main home. In 2006 we moved out and made it a 2 family rental. I moved back in 2014 to one of the two apts (50% rental). I sold the property in 2020. How do I figure out principal residence exclusion? Is the entire rental period excluded because I lived in it for 5 years first?  How do I determine depreciation recapture?  Do i included 100% of depreciation claimed from 2006 to 2014 and then the 50% claimed from 2014 to 2020?  

[ColeenD3]

• Do I included 100% of depreciation claimed from 2006 to 2014 and then the 50% claimed from 2014 to 2020? YES
• Is the entire rental period excluded because I lived in it for 5 years first? No, personal use does not remove depreciation recapture.
• How do I figure out principal residence exclusion? The program will handle that. Just enter the information.

See this answer from Zbucklyo:

Treat this as two separate properties.  On the rental side, you pay capital gains tax on the entire gain, including depreciation recapture.  On the part that used to be a personal residence, you can exclude 250k/500k, but pay depreciation recapture from depreciation since it was converted to a rental.

Simplified example.  You purchased the entire structure for 200k, and sell it for 600k, no capital improvements.  Assuming a 50/50 split, you would have a gain of 200k plus depreciation recapture on the rental portion, and a 200k gain plus smaller depreciation recapture on the personal side. Applying the exclusion on this property eliminates the capital gain, but not depreciation recapture.  You can't apply any if the "leftover" exclusion to the rental side.