Rental property does not qualify for the VA capital gains exclusion. That is for the sale of certain small businesses. What "went wrong" was you answered yes (in the Turbotax interview) when asked if you qualified for this deduction.
If you disagree, The
TurboTax (TT) accuracy guarantee process is explained here
https://ttlc.intuit.com/questions/1901269-how-do-i-submit-a-claim-under-the-turbotax-100-accurate-ca....
but
it only covers actual CALCULATION errors in the program, not user error (and
it’s almost always user error), and it only pays any penalties or interest
resulting from that error, not the taxes. Either way, you are still responsible
for the increase in tax.
