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Selling the rental property is taxable event. As he 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%.
The taxable gain is calculated as (selling price) minus (adjusted basis), where the basis is mainly purchase price plus purchase expenses, plus any expenses to obtain the mortgage and refinance during the time he owned the property plus any improvement (not repair!) expenses, etc.
In additional - he would be required to recapture the depreciation depending on how long the property was rented - 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 - the social security income will be partly taxable - up to 85%.