How do you claim capital gains exclusion from sale of rental property under the Military Families Tax Relief Act?

[sfara002]

Thank you for the screen shots, however, I have already completed these steps.

[tstange]

I am also having an issue with this. I did the live support option yesterday and the "tax professional" had absolutely no clue (so I do not recommend that option). I can take the rental property out of service on the "Rental Properties and Royalties" section and enter it in the "Sale of Home" section; however, it doesn't seem to be taxing the depreciation recapture owed (even though the amount is being entered) at our ordinary tax rate. 

[RobertB4444]

@sfara002  I believe you're asking if you are correct in thinking that you qualify for the Military Home Exemption.  Yes, you are.

@tstange It would calculate it at a long term capital gains rate.

[tstange]

@RobertB4444 : I finally got it to work correctly, but had to clear it and start over. Because we are exempt from capital gains due to the military extension, no long or short term capital gains taxes should be paid. Depreciation recapture is taxed at the ordinary income tax rate.

[RobertB4444]

I know.  But the system didn't.  That was the difference you were seeing.  

Glad you got it to work though!

[anewton_2]

I am having the same issue.  It's saying I owe a lot more than I should.  I might have to start over to clear it out.  Do you have a step by step that you did to show how you got it to show correctly?

[HelenC12]

Please clarify what issue you are having. Are you selling your primary residence, a second home or a rental? 

[anewton_2]

I sold a house that we rented out after having to move for the military. 

Lived in it for 5 years, then rented it for 6.  We are exempt for the capital gain, but have to pay a percentage of the dep.  I took the house out of service and followed directions from this thread about putting it back to personal use, but I am not seeing anywhere in Turbo Tax that makes these steps go easier.  I went to assets and followed the directions there, but if anything it increased what I owe.

[MarilynG1]

It sounds like you were on the right track by indicating 'converted to personal use' in the Rental section.

Once you have the Assets 'converted so personal use'  you will need the amount of Accumulated Depreciation to enter into the 'Sale of Home' section.

Keep in mind, the capital gains will be excluded from your property but ordinary gains will still be taxable if have taken depreciation from your rental property in the past. 

Since we can't see your tax return in this forum,  if you could clarify what issues you are having, we'll try to help.

[anewton_2]

Would it benefit to do the Turbo Tax review and pay for someone to review what I have done?  I am trying to figure out the depreciate.  It says prior depreciation $57,323, then when you edit it says $10,502, but when done it says 2021 dep. is $82.  I am confused on what I use for numbers and then how to take this to the section where I enter I sold the property.

[Critter-3]

Please upgrade to one of the LIVE versions if you are getting lost or confused by this situation.  

[tstange]

@anewton_2: How many years was the home a rental? If it is giving you too much trouble, I would suggest trying to find a CPA or EA near you who is knowledgeable about the military exclusions. When I was having problems initially, I upgraded to the live version and the TT tax professional had absolutely no clue. I knew what I needed to do, however, I couldn’t get the system to do it correctly. Once I cleared the return and completely started over, the numbers were finally correct.

[paris3532]

Do I qualify for this military families tax relief act? To clarify, I mean the capital gains exclusion. I am aware about the 2 years out of the 5 for non-mil members.

background: Bought a home and moved into it in Dec 2006 and moved out in August of 2010 because of military orders. The home was rented out from March 2011 until March 2021. We had the tenants move out in order to sell it and it was sold end of May 2021.

We purchased (but have not paid for it yet) live premier and our tax expert had no idea about this act so I agree with those who say don't pay for live as it is not a guarantee that they will know about this. Our tax expert did at least research this and provided info on how to apply the military clause but I am lost as to how to do this. On my screen, my options are: Rental Properties and Royalties (Sch E), Sale of Business Property, and Sale of Home (gain or loss). Which of these is the section that I am supposed to be editing? Any info would be greatly appreciated.

[ColeenD3]

Since there is no way to indicate military when showing that your rental was also your personal home, you will have to enter your sale through Sale of Home and show the depreciation recapture.

You have to sell as a personal home sale and mark "Military" for 'Other reason for sale".

If this was a rental property you have to know the total depreciation to enter.

The home sale screen will go back 5 years to 2011, you have to work around that as reading it as 2006 for your practical situation the last 5 years will not count;...lived in for 24 months, yes, and so on as asked.

The new law allows persons on qualified extended duty in the U.S. Armed Services or the Foreign Service to suspend this five-year test period for up to 10 years of such duty time.

[conshek1]

I just did the live chat for help and the "tax professional" sent me this link for answers.  Gee- why did I pay to upgrade just to be sent a chat to search through.