Deductions & credits
You are correct, the loss of your second (non-investment, non-rental property) home is not tax deductible, and the basis and the sale price are important in the calculation of your taxes. With the sale of a second home, you will be responsible for paying taxes on any profits you make, at a rate of up to 20%, depending on your tax bracket. You need to know the adjusted basis of the home, and it should be higher than what you paid for it. Even though you sold your home at a loss, it appears that the software may be calculating a capital gain.
According to the IRS, Your second residence (such as a vacation home) is considered a capital asset. Use Schedule D (Form 1040), Capital Gains and Losses and Form 8949, Sales and Other Dispositions of Capital Assets to report sales, exchanges, and other dispositions of capital assets.
Here is an article about Schedule D and form 8949.
The sale of a second home would be recorded in the Investment section.
To reach this screen type investment sales in the search box. Then click Jump to investment sales and follow the prompts.
