Bought house in Florida in June 2013. Called to active duty and rented from Aug 2018 to 2019 and sold house to live somewhere else. Do we need to report?

According to IRS Publication 523 at this link, you need to report the gain if any of the following is true.

• You have taxable gain on your home sale (or on the residential portion of your property if you made separate calculations for home and business) and don’t qualify to exclude all of the gain.
• You received a Form 1099-S. If so, you must report the sale even if you have no taxable gain to report.
• You wish to report your gain as a taxable gain even though some or all of it is eligible for exclusion. You may wish to do this if, for example, you plan to sell another main home within the next 2 years and are likely to receive a larger gain from the sale of that property. If you choose to report, rather than exclude, your taxable gain, you can undo that choice by filing an amended return within 3 years of the due date of your return for the year of the sale, excluding extensions.

If none of the three bullets above is true, you don’t need to report your home sale on your tax return.

Also, consider these things:

• The gain is the difference between your proceeds and what you have "invested" in the house.  What you have invested is known as "cost basis" and that may be more or less than your mortgage balance. 
• If you used your home for business or rental, the depreciation you took on the home is deducted from your "cost basis" when you calculate the gain.  And, the portion of the gain equal to that depreciation is taxed as ordinary income in the year you sell.  There are worksheets in Publication 523 if you need to calculate this.

For your situation specifically, if you have a gain on the sale of the house, the depreciation you deducted (or should have deducted) while it was a rental property will be taxed as ordinary income (i.e., "recaptured").  IRS Publication 523 at this link has the rules on Selling Your Home.  Otherwise, if you lived in the house for 24 months you will qualify for exclusion of the gain on the sale of the house (beyond the amount that must be recaptured as ordinary income). 

The rule is that you live in the house for 24 months during the previous 5 years, but as a deployed service member you can extend that 5 years to 10 years (see the section of IRS Publication 523 at this link).

One important fact that @DavidS127 failed to mention.

Since the last occupant to move out of the property prior to the sale was a renter, you are required to report the sale "no" "matter" "what". Period. You will report this sale in the Rental & Royalty Income (SCH E) of the program. Assuming that between the time the last renter moved out and the closing date of the sale you did not live in the property as your primary residence, 2nd home, vacation home or any other "personal pleasure" use, do not convert it back to personal use unless you wnat to deal with the boat load of additional paperwork that will create in reporting this sale.

Also, even without the 5 year extension for military to the "lived in 2 of last 5 years" rule, you will qualify for the $250K capital gains tax exclusion ($500K if filing joint). But understand that you *WILL* pay taxes on the recaptured depreciaton *no* *matter* *what*. The recaptured depreciation is not exempt from taxes with no exceptions.

Reporting the Sale of Rental Property

If you qualify for the "lived in 2 of last 5 years" capital gains exclusion, then when prompted you WILL indicate that this sale DOES INCLUDE the sale of your main home. For AD MIL personnel who don't qualify because of PCS orders, select this option anyway, because you "MIGHT" qualify for at last a partial exclusion.

Start working through Rental & Royalty Income (SCH E) "AS IF" you did not sell the property. One of the screens near the start will have a selection on it for "I sold or otherwise disposed of this property in  2019". Select it. After you select the "I sold or otherwise disposed of this property in 2019" you continue working it through "as if" you still own it. When you come to the summary screen you will enter all of your rental income and expenses, even it it's zero. Then you MUST work through the "Sale of Assets/Depreciation" section. You must work through each individual asset one at a time to report its disposition (in your case, all your rental assets were sold).

Understand that if more than the property itself is listed in your assets list, then you need to allocate your sales price across all of your assets.  You will only allocate the structure sales price; you will NOT allocate the land sales price, since the land is not a depreciable asset.  Then if you sold this rental at a gain, you must show a gain on all assets, even if that gain is $1. Likewise, if you sold at a loss then you must show a loss on all assets, even if that loss is $1

Basically, when working through an asset you select the option for "I stopped using this asset in 2019" and go from there. Note that you MUST do this for EACH AND EVERY asset listed.

When you finish working through everything listed in the assets section, if you ever at any time you owned this rental you claimed vehicle expenses, then you must also work through the vehicle section and show the disposition of the vehicle. Most likely, your vehicle disposition will be "removed for personal use", as I seriously doubt you sold your vehicle as a part of this rental sale.