If our capital gains from sale of home are excluded, why does TurboTax say I need to report on Schedule D because "you owe taxes on the sale"?

Forum|Forum|4 years ago
February 17, 2022
1 reply
13 views

I reported the sale of our home because we received a 1099-S. However, our gains are excluded because we meet all the requirements and amount thresholds. Why does TurboTax say "Because you owe taxes on the sale of your home..." when we don't owe taxes on the sale since it's excluded?

TurboTax Deluxe Online

DianeW777

Level 15

As long as you meet the requirements of use and timeframe you will not pay any tax on the sale of your home. Review the article and then double check your entries on the sale of your home to be sure you have answered all the questions correctly.

Is the gain on the sale of my main home taxable? Not if you meet the following requirements:
- You owned the home
- It was your main home for two years or more within the five years leading up to the sale
- You waited at least two years between selling your primary home and excluding your prior gain

TurboTax will show you if your home sale is taxable.

Open or continue your return in TurboTax
Search for home sale
Select the Jump to link in the search results
Answer Yes to Did you sell or have your home foreclosed in 2021? on the Sale of Your Main Home screen
Follow the instructions to enter your info - Watch each screen to be make sure you answered correctly to the question

Once you complete the sale you should see the following screen.

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lauranbolingAuthor

Level 2

Thank you for the reply. I did get that message, but once I finish out this section, it tells me I need to upgrade my TurboTax (to include Schedule D) because I owe taxes on the sale of my home. I don't owe taxes though as the gains are excluded. I just don't want to upgrade if I don't have to, especially since I don't owe taxes on it.