Hey TaxGuyBill,
In the same boat, on converting primary home to rental, and then selling between (the FMV+improvements) as the basis and (the original purchase price+improvements) as basis. By adjusting the basis to the sales+depreciation will zero the "gain" or "loss". This seems consistent with Publication 544, page 5.
Just wondering has anyone had an issue with this adjustment?
Also, thanks a ton for posting your explanation.
