I sold a rental property that my brother and I owned for 12 years because he needed his half of the equity to purchase a new home in his new town. We almost doubled the sales price from the purchase price. I am going to reinvest my money in a home for my family to live in and therefore not doing a starker exchange. Here's the question: we have depreciated the value of the home on our taxes every year (27.5 year straight line depreciation), what kind of tax liability do we have from the depreciation? Do we have to pay back the depreciation amount?