We purchased a single family residence in 1995 for $122,500 and lived in it until 2009. We did make some significant improvements to the property when we lived in it from 1995 to 2009 but don't have exact numbers or full receipts. In 2009 we converted it to a rental when it had a FMV of $217,000. We did make some improvements during the time we held it as a rental (approximately $5,000 for flooring, which we do have full receipts for) We sold the property in 2016 for $280,000 and are (Still!) trying to complete the 2016 taxes for this. There was no personal use of the property after the conversion from a primary residence to a rental in 2009. How do I determine the basis for capital gains and report the sale in TT home & business? When we go through the steps to show the sale under "Sale of Property/depreciation" section, it appears the capital gains is calculated on the basis of the original $122,500 purchase price in 1995, not the FMV of $217,00 in 2009 when we converted it to a rental. Is this correct?
