In Turbotax you use the home sale worksheet. in addition to indicating the depreciation allowed or allowable while a rental you must indicate the period of non-qualified use. non-qualified use is the period it was a rental. for example, say you acquired the rental 1/1/1998 and converted it to residence on 1/1/2016. the period of nonqualified use is 1/1/2009 to 12/31/2015 (the current law excludes nonqualified use prior to 2009) is 7 years. if occupied from that date until sold say on 12/31/2022 the period of qualified use is 7 years (not really relevant just to point out you meet the 2 out of 5 year occupancy rule). total ownership is 25 years. your home sale exclusion (HSE) is therefore prorated 18/25 of maximum exclusion. Before the HSE is applied, gain up to the depreciation allowed or allowable must be recapture. With proper entries Turbotax can properly report the sale at least in the desktop versions. If you are unsure of entries or took improper depreciation, then run to a pro. Make sure to inquire as to what info to bring.
