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As far as I know (nad that ain't worth much) the home is depreciated at the lower of the two (your cost/basis or the value at conversion. The capital gains, as long as you lived in the home for 2 continuous years within the 5 years from closing date of the sale, $250k in cap gains is tax free. The depreciation is recaptured upon the sale and would be allocated as income, not cap gains. BWTFDIK.

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