I received a form 1099-s but I meet the exclusion. TT is treating the gain as taxable when I shouldn't be. How can I enter the sale w/o the gain showing as taxable?

[Carl]

What did you sell? Your primary home? A rental property that was your primary home for 2 of the last 5 years you owned it? Also, where in the program are you reporting the sale?

If selling a rental property that was your primary home and therefore qualifies for the exclusion, then be aware that you *will* pay taxes on the recaptured depreciation *no* *matter* *what*. Recaptured depreciation is not excluded from taxation.

[ColeenD3]

1. Once you are in your tax return, click on the “Federal Taxes” tab
2. Next click on “Wages & Income”
3. Next click on “I’ll choose what I work on”
4. Scroll down the screen until to come to the section “Less Common Income”
5. Choose “Sale of Home (gain or loss)” and select “start’

Make sure you answer all the questions correctly.  See the screenshots below.

[ColeenD3]

Also, be aware that the amount in the Summary does not mean that the income is taxable to you.

[markdparkinson]

Primary Home, yes....not a rental.  Only reason to report it is because we received a form 1099-s.  We meet all of the criteria to receive the exclusion.  TT treats the gain as taxable simply by entering the sale, doesn't seem to have an area to check that it's not taxable. 

[markdparkinson]

Thx, I'm in the same area as your screen shots.  The problem is once you check the box that you received a 1099-s, it automatically assumes any gain is taxable.  It doesn't run you thru all of the same questions asking about if you qualify for the exclusion like it does if you don't check that you received a 1099-s.  

[Anonymous_]

@markdparkinson Are you entering this transaction in the Less Common Income section under Sale of Home (gain or loss)? 

It almost sounds as if you are not entering the sale in the correct section.

[markdparkinson]

Yes, I'm in the correct section....thx for the mention.  I just called into support, we did a screen share...they said everything I entered was correct.  They are having a CPA review and should be contacting me shortly.  I will post the solution if/when I hear back.  Appreciate all the feedback

[markdparkinson]

Just received an email from TT saying my case is now closed so I doubt I'll be hearing back from that CPA....LOL!  However, I think I may have figured it out.  If you enter the cost basis manually, it then runs thru all of the appropriate questions regarding the exclusion.  If instead, you select the "Easy Guide - Recommended to help calculate the adjusted cost basis" it never does run you thru those exclusion questions.  So I ran thru the easy guide to calculate the cost basis, then deleted the home sale entry, re-entered it and manually put in the calculation I came up with thru the easy guide.  It the ran thru the exclusion questions and determined my "gain" was not taxable.  Might be a better way, but that's what I came up with.  Big thx to all that took the time to provide their feedback....really appreciate it. 

[QuestionBox]

I have a related question. I purchased a fixer upper which I lived in. Later refinanced to a rehab/permanent loan. The date acquired  is different due to this. Do I use the first date and that purchase amount or the refinanced date and purchase amount?

[gloriah5200]

The cost when you purchased it would have been the first time you purchased it, not when you actually applied for a refinance or rehab/permanent loan.

[albertLZ]

Hi Mark. I'm in the exact situation as you were 2 yrs ago. At the end of your process, did it show in your summary that your sale of home is $0? I appreciate your feedback. 

[PattiF]

From @RobertB4444:

 When you enter the sale into TurboTax you should go to 'Income and Expenses' and then scroll down to 'Less Common Income' and then 'Sale of Home (Gain or Loss)'.  The program should ask you all of the questions relevant to excluding the income from the sale of your main home.  

If TurboTax is including the income on your return then please revisit this section and go back through the questions and make sure you answer them carefully and that all of the information entered is correct.  As long as you lived in the home for two out of the last five years and the gain was less than $250,000 (or $500,000 if you're married) you should be able to exclude it.

@albertLZ 

[albertLZ]

Thank you Patiff for the response. When I asked the question, I already completed and saved the process. I tried to delete it so I can do exactly the steps you suggested but not the same. Anyway, if in summary under wages & income and the Sale of Home says $0, does it mean I am not getting taxed?

[PattiF]

Yes, that means that the gain is not taxable.