Thank you for your answer! Unfortunately, I already used $180,000 as the adjusted basis of my rental property in 2013 and had depreciated on this basis ($180,000) since then. Now the FMV is still less than its original purchase price ($370,000). If I sell the rental property this year for $300,000, which basis should I use to calculate gain/loss? Use the original cost ($370,000) or the adjusted basis $240,000 (building $180,000 and land $60,000)?
