We originally bought the house in 1999 for 128k. We converted it to a rental in August of 2013 with a FMV of $155k. The house sold for $169k in June of 2016. The house was a primary residence just over 2 of the prior 5 years and we have used it as a rental and taken depreciation since putting it into rental service. I have completed the section of "Sale of Business Property", but can't figure out how to get the capital gains exclusion for sale of a primary residence.
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You can report the sale, in the rental section; but I think it goes smoother, in TurboTax, if you report it as home sale.
In TurboTax (TT), enter at:
- Federal Taxes tab
- Wages & Income
Scroll down to:
-Less Common Income
- Sale of Home
You will be asked if you had a period of non qualified use, such as rental. Answer No. The following appears on that screen: "Exceptions. A period of nonqualified use does not include:
Any portion of the 5-year period ending on the date of the sale or exchange after the last date you (or your spouse) use the property as a main home". In TT, at the page where it asks if you had any other use of the home it says: "Note: if you used your home for reasons other than primary residence, after it was no longer your primary residence, select 'no'''.
You will then be asked if you claimed any depreciation. Answer yes and enter the depreciation claimed while it was rented
I lived in a condo for 3 years and then rented for 2. The key question in the wizard: "Was this asset included in the sale of your main home?" Make sure you click "Yes". You can read the details by clicking on the links in the question.
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