What may appear as a loss based on your unadjusted basis may become a gain once you adjust your basis for the depreciation recapture. Having said that you will only be taxed on the gain. So it's possible not all of the depreciation recaptured will be taxable.
Here is a simple example.
Unadjusted basis - 10,000
Sales proceeds - 5,000
Loss - 5000
However if you have depreciation to recapture - 6,000
Adjusted basis is - 4,000
Sales proceeds - 5000
Gain - 1000
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