Can I file 540NR form for year 2020? When I tried to pick sell house, message box appears profit under $250k, No tax, So why i am receiving letter from IRS California?

[saivysingh]

I sold house in California in 2020, IRS requested to file 540NR form. How can I do that?

[Critter-3]

Well if you did not report the exempt sale on the return then expect an IRS letter as well  that you will need to answer because you must have gotten a 1099-S at the closing which was also sent to the IRS and the state.  Even if the sale was exempt you still had to address it on the return ... so I think you missed this box in the interview ...

So what you need to do is respond to the state notice with the information that the sale was from a personal residence and was exempt from taxes.  

If you sold your primary personal residence and you lived in and owned the home for at least two years in the five year period on the date of sale, you do not have to report the sale if your gains are less then the exclusion amounts of $250,000 if filing Single or $500,000 if filing Married Filing Jointly (and both lived in the home for two years).  

If you had a gain greater then the exclusion amounts then you would have to report the sale.  Also, if you received a Form 1099-S for the sale either with a gain or a loss, the sale has to be reported.  You will need the online TurboTax Premier or Self-Employed edition to report the sale if you are using the online editions.   Make sure that you indicate that you want the sale of the home reported on your tax return.  (See Screenshot)***

• Click on Federal Taxes (Personal using Home and Business)
• Click on Wages and Income (Personal Income using Home and Business)
• Click on I'll choose what I work on (if shown)
• Scroll down to Less Common Income
• On Sale of Home (gain or loss), click the start or update button

Or enter sale of home in the Search box located in the upper right of the program screen.  Click on Jump to sale of home

[saivysingh]

Thank you for your response, You seem a very knowledgeable person as I said IRS requested the 540NR form to be submitted. I need some help with filling up a form and I can pay for it for your service. Can you help?

[VolvoGirl]

PS...... California is not IRS.  IRS is only the federal return.  California is FTB - Franchise Tax Board.