You could defer (but not eliminate) the tax on the gain by investing the gain in a Qualified Opportunity Fund. If you hold the Qualified Opportunity Fund long enough you could qualify for a reduction of the tax on the gain. This is a totally new way to defer or reduce the tax on capital gains, introduced in the new tax reform law. A Qualified Opportunity Fund is a sophisticated investment, and the tax rules concerning it are not yet entirely settled. If you want to do this, you should obtain professional tax advice.
The investment in the Qualified Opportunity Fund must be made within 180 days of selling the home. You invest only the gain, not the entire proceeds of the sale.
TurboTax does not support deferring capital gain by investing in a Qualified Opportunity Fund. You would not be able to use TurboTax to prepare your tax return.
