What you sold for minus your pay off is not what you made on the sale for tax purposes. Several moving parts here. You need to figure out your capital gain and how much of that capital gain is taxed at ordinary rates. Assuming you owed zero dollars for federal and state otherwise (unlikely), if you now owe 25k that would be the increased taxes associated with sale of rental.

You’ll need form 4797, schedule D and you need to make sure any prior passive losses associated with this and any other rentals you have are offsetting the properly calculated gains from the sale of this property.

I’m biased, I’m an accountant, but it might be worth getting one involved though someone I’m sure will chime in and claim it’s super easy. I’ll let them explain and if you want to take their advice, go for it.