I own two rental properties at the current time but I've only sold primary residences in the past(homestead). I'm wondering how to figure my net take if I decided to sell one of them in the next year. Here are the numbers as they stand on that property. Paid 129K in 2002. Started renting in 2007. To date I've put roughly 25K into the property for upkeep and improvements, new roof, new AC, paint, appliances and misc. fixtures over the last 12 years. Current pay off 117K(took money out to buy another property years ago). Pay off would probably be around 105K in a year. Current market value roughly 245-250K. My plan was to keep it until it was paid off which would be maybe 7 or 8 years at current mortgage payment, then switch my mailing address(homestead it) back there and let a relative stay there for 2 years until I sold it and claim the complete tax exemption ....Well I guess the IRS is smarter than I give them credit for . In other words you're not allowed to do that. I know there is a formula for factoring in depreciation, 27.5 years divided by the "Basis point" which is taxed at 25% but how do I find that number to get to my net? I also know that the difference between that number and additional profit is currently taxed at 15% from what I understand? Any help would be greatly appreciated.