I jacked up the rear of the car yesterday to put on new rotors and pads and with the rear wheel off the ground there is around three inches of turn in the rear wheel. I was wondering what is the normal play in the rear axel?

three inches of play?

the rear wheels have zero play as they are cartridge type twin row ball bearings pressed on with hydraulic force and the center nut is tightened very tight.

If the 3 inches were your bearing, the car would be making really bad sounds. Check again and see what is moving that much, It maybe the link arms completely shot.

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2012 BMW X5 (Beef + Granite suspension model)

1995 E300D - The original humming machine (consumed by Flood 2017)
2000 E320 - The evolution (consumed by flood 2017)

no I said the wheel turns back and fourth around three inches and I am wondering if that is normal play in the rear end.

OH - sorry

do you hear a clunking too?

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2012 BMW X5 (Beef + Granite suspension model)

1995 E300D - The original humming machine (consumed by Flood 2017)
2000 E320 - The evolution (consumed by flood 2017)

With the other rear wheel on the ground, 3" can be possible as you are picking up a bit of play through the drive axles , differential gears , differential ring / pinion , drive shaft slip yoke and finally parking pawl.

However while you are rotating the wheel, look at the axles and the drive shaft for signs of play in one area. The rubber drive discs on the drive shaft ends might be coming apart.