1031 Strategy clarification

[Jimmy Wilson]

I am unclear on a couple of items I have been discussing with a fellow RE investor.  Here is the situation:

Own (2) condos in Breckenridge, CO that are rental properties and owned for 12 years.  If sold, would net a $300K capital gain between the two.

Purchase vacation rental property in Hawaii for $400K, then do a reverse 1031 exchange by selling the (2) Breckenridge, CO condos.

After using the Hawaii vacation rental property as a rental for 3 years, live in it for the last 2 years.  Then, sell the vacation rental utilizing the Section 121 primary residence.

Here is the question:

- If the Hawaii vacation rental is sold utilizing the Sec 121 primary residence, the depreciation recaputure.  Would the depreciation recapture be ONLY for the 3 years the Hawaii vacation rental was in service and depreciated?  Or, would you also have to pay the depreciation recapture for the previous (2) Breckenridge condos that were 1031'd into this property?

Thanks in advance!