Hi all - 2 part question:

Scenario: Property purchased for $200,000 and put into service as rental property. Ten years later, investor moves back into the property for a period of two years and sells for $300,000. He has accumulated $30,000 in deprecation over this period. Investor wants to make use of the primary residence exclusion.

Question 1: Is the entire gain tax free for the investor, even though he only lived in the property for 2 years of the past 12, or only 1/6th of the gain tax free?

Question 2: How does deprecation recapture play into this? Is deprecation still tax free as long as the total of the gain+recapture is below $250,000, or is the deprecation recapture taxed in some other way?

Thank you so much for any assistance!