Investors & landlords

@aquaphyte81   Can you explain the "under reported depreciation"?  Give as much detail as possible.

Yes, the depreciation that you COULD have taken reduces your Adjusted Basis.  If it was sold for more than that Adjusted Basis, yes, you use the purchase price.  If it was sold for less than that, then it depends on some other things (such as the Fair Market Value when it was converted to a rental).