<prompt> Human: Short and sweet: State: Georgia Home purchased in 2007 for 239,900. Husband and I divorced. We kept the property, have been renting it from 2011 - current. Tenants are leaving on Monday. Weve invested almost 10k into the house thus far: granite, new landscaping, top to bottom fresh paint, new carpet, new light fixtures. Looking to list the house for approximately 290. Can someone explain to me the tax portion of this? From what Ive been reading, because it hasnt been a primary occupancy for us within the last 2 years, its considered a business per se, and therefore we are liable for taxes on the amount? I would really appreciate any help here - I feel like Ive been looking at numbers and scenarios and nothing is making sense.THANKS!  <response>: CPA here. You and your spouse would have needed to live in the house for two out of the past 5 years to qualify for the section 121 exclusion no gain on sale of home. For rentals, your gain is generally the selling price less the purchase price, less the improvements, less the closing costs. There is also something called depreciation recapture. If you have been depreciating the building, part of your gain is considered due to depreciation and that will be taxed at your normal rate. Finally, any losses you have carried forward over the past few years will be released and can reduce your gain. This link might help give you an idea: 