: Value of personal house turned rental We bought a house in 2004 for about 150K. We moved for work in 2011 and converted the house to a rental in 2012. The realtor guessed its value at the time was about 70K. We sold it in

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You do not value the house for tax purposes. You don't need to. You know your cost basis exactly, to a cent. Nothing to value.

This is how it works:

You bought it for 0K in 2004.
You converted it to a rental in 2011, with depreciation basis of K (the lesser of the FMV or your original cost basis).
You depreciated between 2011 and 2014 - lets say K got depreciated.
You sold in 2014 for 8K.

What's your cost basis for gain? The original amount paid, minus the depreciation you took (or was supposed to take), and add any improvements or disallowed rental losses. So in our example that would be 0K - 9K - your cost basis is 1K

What's your gain? 8K minus that amount you just calculated as your cost basis, which in our example is larger - so no gain.

What's your cost basis for loss? The K minus any depreciation you took, add improvements (made after converted to rental) and disallowed rental losses. So that would be K in our example.

What's your loss? Nothing. Since your basis for loss is less than the proceeds - you cannot claim loss.

Another important portion is the depreciation recapture. Since you're not selling at a loss, any amount up to the amount of depreciation you took (or could have taken) or up to the amount that brings you even, is taxed at flat 25%. You consider the loss basis for this calculation.

The reason your tax bill doesn't reflect the overall loss in value, is because you cannot claim loss on personal use property. So the loss you incurred while it was your primary residence - is not a loss you can use for tax purposes.