How would I calculate my gains/loss:
* Bought home in 1989 = $120,000 added $30,000 improvements
* Convert to rental in 2002 = $235,000 appraisal value
Depreciation taken $35,000
* Rental property from 2002 to 3/2012, vacant after that
* Foreclosure not finalized, estimate Loan Balance $220K; FMV $150K

Do I need two separate calculations for gain/loss: Prim Hm vs Rental Hm?

1 Prim Hm: $150K($120K + $30K) less $150 FMV = $0
2 Rntl Hm: $200K($235K - $35K) less $150 FMV = ($50K) loss

Will I still have to pay taxes on $35K depreciation? or can I use the Rental Home loss of ($50K) to eliminate the taxable depreciation?