Here is the way the gain is calculated.
Your sale price is $87,600, less real estate commission, closing costs and other escrow/settlement charges.
Your basis is $92,584 less Prior Depreciation of $34,783.
Your gain is figured as your sale price minus your basis.
The amount of the sale you allocate to land will not affect your gain or loss.
You should report the sale through the Rental & Royalty Income (SCH E) section of the program, as Carl, above, suggested.
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