If the last occupant to move out of the property prior to the sale was a renter, then you report the sale in the Rental & Royalty Income (SCH E) section of the program. Nowhere else.
The only way you would report the sale in another section, would be if, at the time the property was placed in service, it's FMV was less than what you paid for it.
Depreciation is based on the *LOWER* of what you paid for the property, or it's FMV at the time you placed it in service. In your case, it is very likely that your FMV when you placed the property in service in 2013, was lower than what you paid for it in 2006 when you purhcased it. If this is the case, then you can "NOT" report the sale in the Rental & Royalty Income (SCH E) section of the program. You have to report it in the "Sale of Business Property" section instead, so that you can use the actual amount you paid for the property as your cost basis to determine your "real" taxable gain on the sale.
So work back through the rental property asset again and let me know if the "COST" is less than what you actually paid for the property. I'll then give you the procedures and guidance for "correctly" reporting your sale so as to lower your taxable gain on that sale.
