Hal_Al
Level 15

Get your taxes done using TurboTax

It’s complicated.

If you used TurboTax (TT) download/CD (any version) software (not online TurboTax), the best way to do an estimate is make a copy of your 2019 return and modify it for your 2020 income, including the taxable portion of the home sale.  The TT software is capable of doing this, but it's complicated.

 

You can try this tool (but, again, your situation is complicated). https://turbotax.intuit.com/tax-tools/calculators/taxcaster/?s=1.
Enter 19% (6/32) of the difference* between the sale price and what you paid for it originally as a long term capital gain (LTCG). Enter the depreciation you've taken over the years (depreciation "recapture") as Misc income. Depending on how much total income you have LTCG are partially taxed at 0%, 15%, 20% and/or 23.8%. Depreciation recapture is taxed at your marginal rate, but not more than 25% (the Taxcaster tool is not capable of applying the 25% cap).

 

When you do your 2020 tax return, early in 2021, any version of TT download or CD software can handle this. With online software, you need Premiere or Self Employment. But, again, it’s complicated.  You should considered having your 2020 tax return done professionally.

 

* The gain will be prorated between the residence time and the rental time. Only "non qualified (rental) use" after 2008 is prorated. Deprecation since May 6, 1997 must still be recaptured, even in a  home sale exclusion situation.

View solution in original post