Turbotax is following IRS directions
the exclusion is limited to the gain after selling expenses and selling expenses are to be separately reported
.
example
sales price $500,000 per closing statement and 1099-S
selling expenses $50,000
tax basis $230,000
thus gain $220,000
exclusion $220,000
taxable $ 0
8949 reporting (this flows to schedule D)
sales price $500,000 as above
cost or other basis $230,000 as above. this is how the IRS wants it since the sales price on the closing statement was not directly reduced by the sales expenses
codes EH for selling expenses and exclusion
amount of adjustment - exclusion $220,000 selling expenses $50,000 total $270,000
taxable gain $500,000 - 230,0000 - $270,000 = 0
had selling expenses been $45,000
sales price reported same as above
cost or other basis same as above
codes same as above
amount of adjustment - exclusion now $225,000 selling expenses $45,000 total $270,000
taxable gain same as above.
code E is for selling expenses. per 8949 instructions In column (g), enter as a negative number (in parentheses) any selling expenses
