Whoa - let's go all the way back to 1998.
You state you have a 2119 form from 1998 that shows a deferred gain from 1998. But how can that be when Form 2119 was no longer used in 1998. See the link below.
https://www.irs.gov/pub/irs-prior/p523--1998.pdf
look at the right side and "important changes"
the laws in 1998 are the same as they are today. The first $250,000 of gain is tax free; end of story. what occured in 1998 is a moot point and has no bearing on current taxes.
or did you mean you sold the home in 1997 and reported it in April 1998 tax forms? the law went into effect on May 7, 1997, so any home sold after that date is subject to the $250,000 / $500,000 exclusion.
What is the EXACT date you sold the home in 1997 / 1998???
https://www.irs.gov/pub/irs-prior/p523--1997.pdf
What is the EXACT wording of the question TT is asking you about a prior sale as I do not think the sale for 1997/ 1998 may not have anything to do with the reason TT is asking?
