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If you are selling your primary residence and you owned and used it as a primary residence at least two out of last five years before the sale - the capital gain is excluded from your taxable income - up to $250,000 for singles and $500,000 for married coupled filing joint returns.
Selling the rental property is taxable event. If you owned the property more than a year - the gain will be taxed as long term gain at lower rates - not more than 15%.
The part of the gain that otherwise would be taxes at 15% or below will not be taxed in 2008 and 2009. The part that otherwise would be taxed at 25% or higher - will be taxed at 15%.
In additional - you would be required to recapture the depreciation depending on how long did you rent the property - that amount will be taxed as your regular income.
Please be advised that additional taxable income will push your adjusted gross income up - and as a side effect - your social security income will be partly taxable.
The Congress is discussing the option to increase tax rates - but there was no any decision this matter yet.
Please let me know if you need any clarification or need help to estimate your tax liability.