"How do I correctly exclude it? Is there an indicator in Schedule D or Form 8949 to mark a stock sale as excluded?"
I think you've hit upon an "unsupported calculation" within TurboTax:
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"Net Investment Income Tax(Form 8960):The program does not automatically support the following scenarios for the calculation of Net Investment Income Tax (NIIT). Make any necessary adjustments on the Form 8960 worksheet:
- Any adjustment to the gain or loss from the disposition of an interest in a partnership or S corporation that should be included on line 5c.
- Activities involving trading in financial instruments or commodities which should be included in NII regardless of material participation.
- Any adjustment to interest or dividend income or to capital gain/loss that is not related to an activity.
- Net operating loss for NIIT purposes.
- Any other adjustments or deductions not accounted for on the Form 8960 worksheet.
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I think you'll need to go into Forms Mode and make those adjustments directly. Click on the "Forms" icon in the upper right hand corner, click on the "Open Form" icon above the list of forms/schedules/worksheets that comprise your income tax return, type in "8960" and click on the "Form 8960 Worksheet" item.
Tom Young
