Thanks for the Reply .... They lived in the property for three years, then rented it out for two years and took depreciation , so I think this is a change of use and I have to prorate the IRC121 Exclusion .. . (I know that that I have to recapture the depreciation)

It seems like most of my Peers think that I should exclude all the gain (excluding the depreciation of course) that they have under IRC 121 (60k GAIN)... I am not sure I agree . Your thoughts ?