I see installment sales in the first question and sale of main home in the second question. If you qualify for the $500k exclusion, it is main home and you are wanting to know if the $38k in expenses can help your tax refund.
Money spent on your main home to buy, to sell, to improve all go into the basis. If you spent $38k to upgrade and improve the home or sell the home, that should be added to your purchase price. It reduces the amount of gain. If your gain is over $500k, it could reduce your tax liability.
You state that you do not need to enter your home because the exclusion covers the sale. You would only enter your main home if you received a 1099-S or if you had taxable income.
Follow these steps for ale of main home entry:
- less common income
- sale of home - note installment sales are listed just below and easy to hit the wrong button
- yes/start
- address of home
- 1099-S - yes or no
- date sold
- sales price
- sales expenses -maybe the $38k goes in sales expenses? You don't say what created the expenses.
- you can ask the program to help you calculate the basis and it will cover everything - the $38k will definitely be in there.
If you did an installment sale and the buyer is paying you every year/ month until the house is paid, you would need to file the 6252 for an installment sale. It is filled out every year until the house is sold. Your first question shows you in the installment sale screens.
If you sold you main home as an installment sale with no taxable gain, you would file installment sale Form 6252 and report interest income on Sch B.
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