Gain Exclusion - conflict between pub 523 and sec 121?

[David]

TP sold his primary residence in 2015 that he purchased in 1994. The house was rental property until mid 2010 and the TP lived in it from mid 2010 until he sold it at a gain of $189K.

I reported the non-qualified use from 2009 to mid 2010 and calculated a $9K taxable gain for the non-qualified use. I also reported $41K gain related to depreciation taken through the rental years. 

This is in accordance with sec. 121.

However, pub. 523 page 7 appears to say that if the TP did not use the house for business in the year of sale or did not receive rental income in the year of sale, then the TP receives the full $250K gain exclusion. Pub 523 also states that the TP has to report gain for depreciation taken for the rental property, which is in agreement with sec. 121.

Can anyone clear up this apparent discrepancy for me?

Thanks.

 

[Abby Normal]

Pub 523 line 7 does not say you get the full 250K exclusion. After you determine your gain, you need to use the worksheet on pages 15 & 16 to see how much is taxable.

[David]

OK, I knew there shouldn't be a conflict. I guess I misread the instructions.

Thanks for your help.