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If you live in the home as your main home for at least 2 years in the 5 years prior to sell you can then use the IRC 121 to exclude gain (up to $250k if single and $500k if married filing joint).
You can deduct interest on a main home and a second home using Schedule A.
You do need to stop depreciating the property that is no longer rental. You would not file the Schedule E any longer. When you sell the rental you will need to look at DEPRECIATION RECAPTURE. The exclusion of gain under IRC 121 does not cover you for the depreciation amount that you have to count as income when you sell.
Until you sell you need not report any change yet.