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BUG? Error in PA income calculation due to loss on house sale being counted as income

I sold a home in PA in 2023. Sold for same price I paid for, and accounting for other costs sale was a net loss. However, owned less than two years, so had to work through taxable sale worksheets.  After working through the house sale worksheet for federal, turbotax determined I had a $44K loss and indicated that I don't need to report the sale. 

 

Now when working on my PA state return, I work through the"taxable sale of a principal residence" section and on the net gain or loss screen turbotax states "Your net Pennsylvania loss on the residential part of the sale of your personal residence is $43,914.00. This will not appear on your tax return." after it imports the information from the federal worksheet. However, on the Pennsylvania incomes/deductions summary screen, it lists the $43,914 as "Sales, Exchanges, Dispositions" income, ultimately leading to me owing $1400 in income tax on the loss amount. 

 

I think this is a bug in the carryover from the worksheet, and would appreciate some help tracking this down. 

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7 Replies
DianeW777
Expert Alumni

BUG? Error in PA income calculation due to loss on house sale being counted as income

Definitely there is no gain in PA and should not create any taxable income from the home sale.  It could be more beneficial if you would like to send a diagnostic copy for us.  

 

If you would like to send us a “diagnostic” file that has your “numbers” but not your personal information it would help.  If you would like to do this, here are the instructions: 

 

TurboTax Online:

Go to the black panel on the left side of your program and select Tax Tools. 

  1. Then select Tools below Tax Tools. 
  2. A window will pop up which says Tools Center.  
  3. On this screen, select Share my file with Agent. 
  4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number. 
  5. Reply to this thread with your Token number and your state. This will allow us to open a copy of your return without seeing any personal information.  

TurboTax CD/Download:

If you like, you can send a copy of your return that will be scrubbed to eliminate your personal data by using these steps:

  1. Click on Online in the top left menu of TurboTax CD/Download for Windows
  2. Select 'Send Tax File to Agent'
  3. Write down or send an image of your token number and state then place in this issue.
  4. We can then review your exact scenario for a solution.
  5. Please also tell us any states included in the return. This is necessary for us to view the return.

 

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.

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BUG? Error in PA income calculation due to loss on house sale being counted as income

Thanks for the quick reply. I shared a copy of my return - the token number is 1174776.

 

BUG? Error in PA income calculation due to loss on house sale being counted as income

Oh, and state is Pennsylvania.

BUG? Error in PA income calculation due to loss on house sale being counted as income

Any progress on fixing this bug?

DianeW777
Expert Alumni

BUG? Error in PA income calculation due to loss on house sale being counted as income

Is there another state in your file besides PA?

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DianeW777
Expert Alumni

BUG? Error in PA income calculation due to loss on house sale being counted as income

Here is the solution. Since this is not a reportable transaction because it is an overall loss on the sale my advice is to remove all of the information from the federal return.  This removes it from the Pennsylvania (PA) return and corrects the balance due.  As indicated the sale is a personal loss and is not allowed to offset any other income on the federal return.  As far as PA goes, they do not allow any personal use property losses either.  Your return is completely correct without the disallowed loss.

 

This will resolve this experience without issue because the information that is not required to be reportable is not actually sent with the return data.  

 

Keep all of your documents related to the sale and purchase of this home with your tax records for at least three years. 

 

@tomindc 

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BUG? Error in PA income calculation due to loss on house sale being counted as income

Thanks for the help on this - I'll go ahead and remove the sale as you suggest.

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