Capital Gains Exemption

[ParisthePug]

We are in our 80s.  We have lived in our current house for over 10 years.  We plan to move soon.  We will not be buying a new home and would like to rent our current house for at least a couple years.  What are our rules for the $500K capital gains exemption when we eventually sell our current home?

[VolvoGirl]

For a primary home, if you owned and lived in your house for 2 out of the last 5 years when you sell you can exclude the gain up to $250,000 for single or  500,000 for married from tax.  You can not take a loss on your tax return.

But you will also have to recapture the depreciation you took or could have taken while you were renting it.  The depreciation will be taxable.  

[ParisthePug]

So we could rent it for 3 years before we'd have to sell it and still qualify for the $500k exemption.

So if we claim the rental management company expenses but not depreciation, we won't have to adjust the depreciation on our income taxes when we sell it within 3 years?  The management company expenses do not have to be adjusted later?