If this is one property, legally, I'd be inclined to report it as one sale.

Based on your initial post, the gain is taxable, due to depreciation. The only taxable amount would be the total gain. Depreciation in excess of that gain is a nonissue.

Depending on the facts and circumstances, an argument might be paid to bifurcate the sale - one part principal residence and one part rental property. In which case, your conclusion is correct and probably results in more taxable income.