I sold a rental property (house and land) that I used to live in as my personal residence before the rental. I am eligible for a partial home sales tax exclusion ($50K, for illustration purpose). TurboTax (TT) keeps erroring out with "Double click to Link sale to Home Sale wks". It seems that TT does not like that I have a loss on the house part (-$10K, for illustration purpose) of the sale, even though I have a gain (+$40K, for illustration purpose) on the land part of the sale. TT wants me to delete the link to Home Sale wks. When I delete the link to Home Sale wks, my tax burden explodes since, I think, TT removes the partial home sale tax exclusion that is in the Home Sale wks. I think I should be allowed the partial home sale tax exclusion on the difference between the gain of the land part and the house loss part, yielding a net gain of $30K ( $40K - $10K). If my total depreciation is $20K, then, I think of the $30K net gain, $20K would go to depreciation recapture and $10K toward my partial home sale tax exclusion (I understand that the rest of the partial home sales exclusion of $40K ($50K - $10K) would evaporate). This means that I should owe tax on $20K, not $30K which TT tries to do. Any help is appreciated in resolving this "Double click to Link sale to Home Sale wks" error while maintaining my home sale exclusion. (Note: Assume that income is such that I will have to pay taxes).
