It depends because this is a rental as well as it was once a residence. To try to properly answer this question, I looked at this Turbo Tax link. With this link in mind, here is my analysis.
- If this was strictly a personal residence, the military parameters are that you would have had to live in home for 2 out of the previous 10 years to qualify for the exclusion. This means that you would had to live in the home two years in the period of 2011-2021. You didn't meet this requirement.
- You still need to report this as a sale of a rental. There is still normal depreciation recapture that has to be claimed on your return regardless on whether or not you were in the military.
To report the rental sale go to;
- With your return open in TurboTax,
- Go to federal>wages and income>Rentals, Royalties, and Farm>ental Properties and Royalties (Sch E)
- Answer Yes to the question Did you have any rental or royalty income and expenses?
- When you get to Is this a rental property or royalty? select Rental property and fill out the description, address, and owner.
- When you hit Do any of these situations apply? you'll definitely want to check the Sold box along with any other boxes that may apply.
- Continue following the onscreen prompts to enter info about your rental property. Eventually you'll get to the Rental Summary screen. Here, you can report the sale in the Sale of Property/Depreciation section, along with any other pertinent info (income, expenses, etc.)
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