Sale of home- I owned my condo for 12 years in the middle I rented it for two years at a loss and took a depreciation. I lived there 4 years after what do I have to do

[CathiM · Accepted solution]

It sounds like you may qualify to exclude the gain, see below. But if you have recaptured depreciation and you didn't report it 4 years ago when you converted the property to personal use, you should include it income this year. Assuming the property appreciated and didn't depreciate. Depreciation recapture should be reported as an ordinary gain not capital gain. Did you take the property out of the rental section 4 years ago? If so, this should have taken care of it.

To qualify, you must have owned your home and used it as your main residence for at least two years in the five-year period before you sell it. You also must not have excluded another home from capital gains in the two-year period before the home sale. If you meet those rules, you can exclude up to $250,000 in gains from a home sale if you’re single and up to $500,000 if you’re married filing jointly.

Your adjusted basis is generally your cost in acquiring your home plus the cost of any capital improvements you made, plus the closing and selling costs, less casualty loss amounts and other decreases.