if you were renting it out, you would report the sale of the rental property in the rental section.
That needs clarification. If the property was still classified as a rental at the time you sold it *AND* the cost basis was correct, then yes, you report the sale in the SCH E section of the program. However:
1. If the property was converted to personal use in a prior year, then you report the sale in the "Sale of Business Property" section.
2. If the property was converted to personal use *and* was your primary residence at the time of the sale, you'd report the sale in the "Sale of Home (Gain or Loss) section. That section allows for consideration of depreciation recapture, if one makes the correct selections.
3. If at the time the property was converted to a rental, if your depreciation cost basis was lower than your acquisition cost basis and you sold at a gain, you report the sale in the "Sale of Business Property" section so the gain will be figured on the acquisition cost basis. Very few will have this specific scenario, but it can't be ruled out as impossible.
