You must pay recapture on the depreciation that you claimed or could have claimed, even if you didn't claim it.
When you place a property in service as a rental, you are asked the basis for depreciation. That would be your adjusted cost basis, or the present fair market value (whichever is lower), less the value of the land because land doesn't depreciate. It sounds like you did not enter a basis, although someone needs to check your tax returns to be sure what the problem is.
You recapture all the depreciation, the tax rate is ordinary income, capped at 25%. So the rate could be 10%, 12%, 22%, or 25%, depending on your other income, deductions and filing status. The calculation works something like this:
Original cost: 100,000
Improvements added to basis 20,000
Depreciation 30,000
Adjusted cost basis 90,000
Selling price 200,000
Capital gain (proceeds minus basis) 110,000
Gain due to recapture 30,000 -- taxed as ordinary income
Remaining gain 80,000 taxed as long term capital gains (15% or 20% depending on other income)
If you failed to take depreciation, you must still pay tax on the recaptured depreciation you should have taken. To get a tax deduction (tax benefit) for the depreciation you should have been taking, you need to file form 3115. This is complicated and you will almost certainly need the help of a tax professional. Take all your old tax returns and other documents to a professional and ask for their help.
