1)  Yes, plus the tax on the depreciation. 2)  No...
Level 9

Deductions & credits

1)  Yes, plus the tax on the depreciation.

2)  No, the mortgage does not factor into calculating the gain from the sale.

3)  Have you been renting out the property?  Have you been depreciating it with TurboTax?  TurboTax should have a "Depreciation and Amortization Worksheet" that will show the "prior depreciation" and "current depreciation".  If you have been using TurboTax the entire time, it will probably even automatically enter that number for you when you enter the sale in the Rental section.

As a side note, the depreciation is taxed at your regular tax bracket, up to 25%.  That means if you are in the 15% tax bracket, you may only pay 15% on the depreciation.  Also, don't forget State taxes.

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