What should I use as cost basis for the sale? The original purchase price of $92k?
Bear with me while I state what may be obvious for the sake of clarity.
When you converted the property to a rental in 2009, you were required to depreciate it. The amount used for depreciation is based on the *LESSER* amount of:
1) What you paid for it when you originally purchased it, or;
2) The FMV of the property on the date you converted it.
By your own statement, what you paid for the property when you originally purchased it is the *lower* amount, and is what you were required to use (and should have used) for depreciation of the property. The actually amount depreciated would actually be much lower than the original $92K you paid for it, because the value of the land is never depreciated. Only the value of the structure on that land is depreciated over 27.5 years.
Assuming you set things up correctly in Turbo Tax back in 2009 when you converted the property to a rental, you can use the below guidance to report the sale in the SCH E section of the program. The program (not you) will take care of all depreciation recapture as well as any PAL carry over losses if you have those, which are released and fully deductible from all other "ordinary" income in the tax year you sell the property.
Once done with the below, you can (and should) review the Form 4797 and SCH D that will be generated by the program for reporting this sale to the IRS.
As a note, since the property was not your primary residence for at least 2 of the last 5 years you owned it, you do not qualify for the capital gains tax exclusion, assuming you are not active duty military. Please read the below completely before you do anything. Otherwise, you risk incorrect reporting and the possibility of paying more tax than you should.
Reporting the Sale of Rental Property
If you qualify for the "lived in 2 of last 5 years" capital gains exclusion, then when prompted you WILL indicate that this sale DOES INCLUDE the sale of your main home. For AD MIL personnel who don't qualify because of PCS orders, select this option anyway, because you "MIGHT" qualify for at last a partial exclusion.
Start working through Rental & Royalty Income (SCH E) "AS IF" you did not sell the property. One of the screens near the start will have a selection on it for "I sold or otherwise disposed of this property in 2021". Select it. After you select the "I sold or otherwise disposed of this property in 2021" you continue working it through "as if" you still own it. When you come to the summary screen you will enter all of your rental income and expenses, even if it's zero. Then you MUST work through the "Sale of Property/Depreciation" section. You must work through each individual asset one at a time to report its disposition (in your case, all your rental assets were sold).
Understand that if more than the property itself is listed in your assets list, then you need to allocate your sales price across all of your assets. You will only allocate the structure sales price; you will NOT allocate the land sales price, since the land is not a depreciable asset. Then if you sold this rental at a gain, you must show a gain on all assets, even if that gain is $1 on some assets. Likewise, if you sold at a loss then you must show a loss on all assets, even if that loss is $1 on some assets.
Basically, when working through an asset you select the option for "I stopped using this asset in 2021" and go from there. Note that you MUST do this for EACH AND EVERY asset listed.
When you finish working through everything listed in the assets section, if you ever at any time you owned this rental you claimed vehicle expenses, then you must also work through the vehicle section and show the disposition of the vehicle. Most likely, your vehicle disposition will be "removed for personal use", as I seriously doubt you sold your vehicle as a part of this rental sale.
