@khopton wrote:
I am told by one expert that in 2022 what I sold was a primary residence and thus I should complete the Sale of Main Home Worksheet to determine 121 exclusion, Form 8949 and Schedule D with Unrecaptured Section 1250 Gain Worksheet. No Form 4797 because I sold the property as a primary residence, not a rental property. Cannot reactivate Schedule E because the property is no longer a rental.
You were told correctly by this expert (quoted above) and that is the proper procedure.
You wind up with an 8949, Schedule D and the 1250 worksheet but not a 4797 since the last use was as your principal residence.
Essentially, you have a disqualified period (the rental period) and unrecaptured Section 1250 gain.
