Deductions & credits

You will need to report this sale as the sale of a capital asset on your federal tax return.

If you have a gain on this sale, you will need to file a nonresident OR state tax return to report this OR source capital gain. You will also need to include it on your CA resident state tax return and you will get a state tax credit in CA for this OR sourced income.

You will want to work on your non-resident OR state tax return first. You will then take a tax credit from your non-resident OR taxes on your resident CA state tax return. (Please note that you will only get a tax credit for your OR taxes up to the amount of CA taxes that would have been paid if the income was earned in CA). 

Just follow the TurboTax guide when working on your states (remembering to do your non-resident state return first) and TurboTax will do all the calculations and credits to your resident states return

Unfortunately, the IRS does not allow a capital loss on the sale of personal use property. This rule applies to the sale of a vacation/second home that was a personal use property. The TurboTax system will enter a capital loss of zero for this transaction. Therefore you will have no OR filing requirement related to this sale if a loss.

Please refer to this link for more information about reporting the sale of a capital asset

To enter this transaction in TurboTax Online or Desktop, please follow these steps:

1. Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
2. Next click on “Wages & Income” ("Personal Income" in TurboTax Home & Business)
3. Next click on “I’ll choose what I work on” (jump to full list)
4. Scroll down the screen until to come to the section “Investment Income”
5. Choose “Stocks, Mutual Funds, Bonds, Other” and select “start’ (or “update” is you have already worked on this section)
6. The first screen will ask if you sold any investments during the current tax year (This includes any sale of real property held as an investment property so answer “yes” to this question)
7. Since you did not receive a 1099-B, answer “no” to the 1099-B question
8. Choose type of investment you sold - select Second Home
9. Some basic information:
1. Description –  Usually the address of the property sold
2. Sales Proceeds – Net proceeds from the sale 
3. Date Sold – Date you sold the property
10. Tell us how you acquired the property - purchased
11. Any business or rental use? - if no, then select personal use only
12. Some Basis information
1. Date Acquired
2. Original cost basis
3. Cost of improvements