I understand the sale of an asset (rental property) has the total depreciation taken while a rental (you can't depreciate owner occupied property) which should already have the capital improvements in the program that itemize the depreciation that was taken during the tax years it was a rental. But the additional items are not capital improvements that were depreciated during the rental phase, they are items that add to the basis while I occupied it as my home for many years. It is not proper in my opinion to add that to the basis in Sch E which is for a rental business. Additionally, you can declare the mortgage loan "costs" for the loan too (this is not mortgage interest) I think their should be a Capital Gains Sch. that can deal with this without these work arounds that muddle the waters.
