Investors & landlords

If the home is currently set up as a rental on your return at the time of sale, then you need to complete the sale in the rental asset or assets.

You will need to answer "No" to Special Handling to answer the questions about using it as a home On the next screen you will be asked 'Was this asset included in the sale of your main home?'. Select Yes and then follow the screens to finish the reporting of your home/rental sale.

TurboTax will allocate the proper taxable amount due to the depreciation from the gain on the sale, only gain that exceeds this will be eligible for the exclusion.  You will not see 100% of the gain excluded, even if the total gain is below $500,000 for married taxpayers.

See the images below as well as the comments from @Carl and @Critter-3.

[Edited: 03/23/2021 | 8:35a]