Why are pre taxed investments included as capitol gains?

[Stephen Edwards]

If I saved $100,000.00 out of my income over the years and now decide I want to buy rental properties. Now this money is not considered pre taxed or accounted for by the I.R.S. The entire amount is depreciated over 27.5 years and then I pay income tax on it as a gain. However if I bought a property for $100,000.00 and resold (flipped) it for $120,000.00, I would only pay on the $20,000.00 gain. Can somebody help me understand this? Am I missing something here?