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The program thinks that your land cost is your only cost, so when it is compared to the sale price, it looks like a huge gain.   However, your "Cost Basis" isn't just the land; it is the (Land Cost + Construction Costs + Capital Improvements).  The program doesn't have a separate box for "construction costs"... you need to add all these costs together to get a total (which you will enter as the "Adjusted Basis").   Delete the entries from your 1099-S (or delete the form entirely).   Here's the general procedure for viewing a list of all the forms in your return and deleting unwanted forms, schedules, and worksheets in TurboTax Online: Open or continue your return. On Tax Home, select Start, Continue, or Pick up where you left off to enter your return. In the left menu, select Tax Tools and then Tools. In the pop-up window Tool Center, choose Delete a form. Select Delete next to the form, schedule, and worksheet in the list and follow the instructions. TurboTax FAQ: How do I view and delete forms in TurboTax Online? Enter the Sale of Home here: Open or continue your return. Search for "sale of home" in the Search box. Click on "jump to sale of home" link Answer the interview questions.  Date you purchased home should be your construction completion date (or when you moved in). Eventually, you will land on your ''Home purchase price and basis details" where you will enter your total adjusted basis cost.   There is a $250,000 (MFJ $500,000) capital gains exclusion on the sale of you home if your filing status is Single.

It depends. The IRS requires this adjustment to make sure taxpayers don’t get a “double benefit.” Since Qualified Dividends are taxed at lower rates (0%, 15%, or 20%) instead of regular income rates (which can be as high as 37%), you need to reduce the foreign income reported on Form 1116, Line 1a.   You must make this adjustment unless you meet the "Adjustment Exception." You meet the exception (and don't need to adjust) if:   Your total foreign qualified dividends and capital gains are less than $20,000.  AND you fall below certain taxable income thresholds ($191,950 for Single / $383,900 for MFJ in 2025). If you are below those amounts, TurboTax leaves the box unchecked because the adjustment usually reduces your credit (by lowering the numerator in the credit limit fraction). I would not recommend checking the box unless your foreign qualified dividends are over $20K and your taxable income are over ‌the threshold amounts I have just listed above.    If it is necessary for you to make the adjustments, follow these instructions, depending on which version of TurboTax you are using.   In TurboTax Desktop (CD/Download):   Switch to Forms Mode (click the "Forms" icon in the top right). In the left-hand list of forms, find and click on Form 1116 Wks (the Foreign Tax Credit Worksheet). Scroll down to the Smart Worksheet section located just above Part I. You can manually check the box here. Once checked, TurboTax will use the IRS factors (e.g., 0.4054 for the 15% rate or 0.5405 for the 20% rate) to recalculate Line 1a.  If using TurboTax Online.   Go to Federal > Deductions & Credits > Estimates and Other Taxes Paid > Foreign Tax Credit. When you reach the screen titled "Any Foreign Source Qualified Dividends or LT Cap Gains?", you must select Yes. TurboTax will then ask you for the specific amount of qualified dividends for each country. If your income exceeds the IRS thresholds mentioned above, it will apply the factors automatically behind the scenes. In both versions, the adjustment factors are performed in the program so you don't need to manually record these in your return.    Again, let me emphasize, do not check the box if you meet the adjustment exemptions I mentioned earlier. If you do, you will receive a smaller foreign tax credit and that shouldn't be your goal.   @aptiva4tt17