Yes, you must report the sale of the home in the year that it was sold to the IRS on your tax return. In TurboTax:
1) Select Wage & Income Section
2) Select at the bottom the Less Common Income
3) Select Sell of Home (Gain or Loss)
Continue to answer the questions. You will be able to enter the information you received on the 1099-S as well as the Purchase price, Sales Expenses, Improvements, etc. Here is great link with information on what you can deduct when selling a home: I sold my home, what can I deduct?
