I am using Turbo Tax Deluxe Desktop. We recently sold our primary home which we had both lived in for more than 2 of the last 5 years. My understanding is that we should not have to pay capital gains on the increase in value if it is less than $250,000. However Turbo Tax is showing that we do owe.
We purchased the land the home we recently sold and then had a home built on it a couple years later. The only Hud1 date and amount I have is from the purchase of the land which I entered into TurboTax. Where do I show the cost of the home build? Turbo Tax never asked me about the 2 of the last 5 years which I think is key to getting the capital gains to not be taxable.
Everything we put into the house (lot & construction) that was sold is still less than $250K so that limit is not the problem. I deleted the 1099S entry and I will try to enter it again after getting some feedback here.
Anyone have any suggestions? Thank you for your time.
