We have had a rental property for 20+ years. I'm retired military and we were moved overseas while owning the house. We rented the property for many years and have a large passive carryover as well as depreciation. Since we were military, we could use the additional years for the qualifying 2 years living in house. My question is:
1. How do I put in the $500,000 capitol gain exemption for the sale of our house.
2. How do I then put in the large passive carryover
3. How do I put in the depreciation and what numbers do I use for each and in which section is each entered.
Please use the following numbers for simplicity (not real numbers.)
Home sale: $1,000,000
Passive carryover: $200,000
Cost basis: $400,000
Depreciation: $150,000
Exemption: $500,000 (two of us)
Thanks!
