1) I don't recommend you use the amount on the 1099-S at all. This is because in my past experience over the years, issuers of that form can't seem to make up their minds. It may show the actual cash that was put in your hand at the closing, or it may show the "real" gain on the sale after expenses, or it may or may not include the existing mortgage payoff amount. So your sales price is the price you contracted to sell it at. Your taxable gain if any, will be any gain realized after subtracting your cost basis and any sales expenses, then adding any recaptured depreciation to that.
2. As the seller, you don't have any sales expenses associated with acquisition of the property. It's common for the buyer to pay those expenses. You may have expenses associated with disposition of your mortgage on the property, as disposition of the property itself. For example, if you paid commissions to a realtor, that's a sales expense. Typically, commissions are the biggest sales expense and in some cases may be the only sales expense of the seller. But you have to look at your copy of the closing statement to see if you have any other expenses you paid as the seller, with the amount shown in the "Paid from seller's funds at settlement" column on the HUD-1 closing statement.
Other expenses you could have but would not be common for the seller, would be a portion of property taxes that may be due. But it's more common for the buyer to re-reimburse the seller a pro-rated amount of the property taxes the seller paid at some point in time within the last 12 months of the closing.The reimbursed amount of property taxes actually gets added to your gain.
