When the room was being used as a rental you received a depreciation expense on the Schedule E you reported for the rental income and expenses.
When the home was sold, the tax code requires that all depreciation is recaptured and entered as income (capital gains) on the return in the year of the sale.
This is no different then if you owed a home and used it as a rental property where you depreciated the property every year getting the benefit of the depreciation as an expense which was used to reduce the rental income you received. The depreciation must be recaptured on the rental property when sold.
