Section 121 exclusion: date of sale for Lease Purchase agreement?

[David B.]

I converted my primary residence to rental in Dec 2014.  In Oct 2017, the tenant agreed to purchase the home. Although I sold the home at a significant loss, I'll actually end up with a gain due to depreciation recapture.

The Oct 2017 Lease Purchase addendum established the sales price and stipulated a portion of the buyers monthly lease payments to be applied toward the purchase. It gives the buyer 30 months to complete the sale. The closing is scheduled for this week.

If the date of sale is considered to be April 2020, I will not be eligible for the Section 121 exclusion since I haven't lived in the house since 2014. However, if the Oct 2017 Lease Purchase addendum is considered the sale date, then I would qualify for the exclusion.

I'm guessing I'm out of luck but wanted to check with the experts here before discounting the possibility. In case it matters, my tenant assumed full burden of ownership as of October 2017 (except property taxes). In fact, they spent close to $20k on improvements since signing the Lease Purchase agreement.