I have owned a rental property for ten years that I purchased from a non-relative at FMV in 2005 for 210k. I have reported a net loss each year on my taxes of about 15k from depreciating my rental property, deducting my mortgage interest from the loan on this house, and adding back my rental income.

My adjusted cost basis ten years later after depreciation is deducted and improvements are included is now 150k.

I don't want to have any capital gains on this property (or have to recapture any previously deducted depreciation) so I am selling it back to the original owner from 2005.

My question is if I sell my house for 150k and the FMV is 250k is the IRS going to say my sale in 2015 is actually now a gain of 100k because I should have sold it for FMV? I'm not trying to pick up a loss on the sale as I just want to sell it at my current tax basis.

Thanks