When you sell a rental property, all prior depreciation is recaptured in the year of sale and taxed. So it's that three years of depreciation for the years it was a rental.
Even if you did not take depreciation, you are still required to recapture and pay taxes on the depreciation you "should" have taken.
If you reported it correctly in the SCH E section of the program, the recaptured depreciation is taxed at the ordinary income tax rate, while your capital gain on the sale is taxed at the capital gains tax rate.
Are there different factors that are included aside from the purchase price and sale price?
I can't speak for a state return. But my guess would be that the state taxes your depreciation recapture differently.
