@mbmast Yes, in regards to your question about the sale of the property. If it was a rental activity, and it was sold, there would be taxable gain. The amount of gain up to the amount of depreciation claimed would be subject to a maximum rate of 25%, while any excess gain if applicable, would receive the lower 0% - 20% depending on income level, if the holding period was greater than one year. If the holding period was one year or less then the gain would be subject to the ordinary tax rate which is based on income and regular tax rates.
For clarification, the answer provided in 2020, was not responding to the original question about an apartment lease buyout which was asked in 2019.
The answer you provided would apply to a lease buyout question only. IRS Publication 544, which states "Payments received by a tenant for the cancellation of a lease are treated as an amount realized from the sale of property."
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