Capital Gains Partial Exclusion

[bhoward1963]

My husband lost his job in November 2022.  He collected North Carolina unemployment for about a month, and then found another position in Michigan - started December 2022.

We had sold a home previously in NC in July 2021 and excluded the gain. We purchased a new home on the same day.  

This home was our main residence for 19 months - we sold it in February 2023. 

Since we moved 761 miles  - I am assuming we qualify for a partial gain on the exclusion.

My question is - where if anywhere does this get reported?  Do I just need to keep documentation in case of an audit?  I have his offer letter, unemployment papers, and the quote for the cost of the move.

[rjs · Accepted solution]

When you enter the sale of your home in TurboTax, it will ask about a previous sale. Read the questions carefully. When you say that you sold another home less that two years ago, it will ask the reason for the current sale. Select "Change in place of employment." Continue through all the questions. TurboTax will calculate the partial exclusion and report it appropriately on your tax return.

You do have to save all your records, of course, for at least three years after you file the tax return. Your records include your 2021 tax return reporting the previous sale, and the records of the 2023 sale, as well as documentation of the reason for the move. "The cost of the move" is not deductible, so you don't need records of that.

To enter the sale of your primary home in TurboTax, go to:

• Federal Taxes
• Wages & Income
• I'll choose what I work on
• Less Common Income
• Sale of Home

Or, in the Search box type "sale of home" (without the quotes), then click the link that says "Jump to sale of home."

[tagteam]

Did you receive a 1099-S from the closing agent? 

If so, you must report the transaction, and it would be a good practice to report the sale regardless.

[bhoward1963]

Thank you!  That worked like a charm.

[bhoward1963]

Yes - I did receive a 1099-S.