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The sale of rental property is reported on from 4797.
Generally - we need separately report two assets - the land and the building.The gain or loss will be calculated on that form 4797 as (selling price) MINUS (adjusted basis)The basis is generally original purchase price (assuming the property was purchased) - adjusted by improvements, selling expenses and depreciation.
If the rental property was owned more than a year - the gain is taxed as long term capital gain, but if the loss is realized on that sale transaction - it is fully deductible as ordinary loss.
Another aspect to consider - all previously disallowed rental losses are fully deductible in the year the property is sold.
Let me know if you need any help with reporting?