Any depreciation will have to be recaptured and taxed as ordinary income. If you have a profit over and above that amount, you will taxed at capital gains rates on that portion.

You may add closing costs to the basis to reduce the gain.

Closing costs (Title fees, real estate commissions, documentary stamps, credit report costs, costs of an abstract, transfer taxes, home inspection, flood certificate, attorney fees, etc. ), instead of being deductible, reduce the sales price of the property.