I need some help understanding why Turbo Tax does not consider the gain on the 5/14/2021 sale of our family home to qualify as a tax exempt for capital gains. I received the 1099-S after I filed my 2021 return and I’m now filing an amended return to include the sale.
We closed the purchase of the property in question on 2/6/2019, closed the sale of the property on 5/14/2021 and lived in the property the entire time (27 months). We had a net gain of $63,736.59 which we expected would qualify for the $250,000 (per person) tax-free exemption on capital gains from a primary residence. When attempting to prepare an amended return including this information, Turbo Tax is considering the gain to be taxable which is adding $11,000 to our tax bill.
The last time we used this exemption was in our 2018 tax return which included the sale of our prior family home (of 10 years) which sold on 7/31/2018.
Please advise how I can get Turbo Tax to recognize this sale as non-taxable or explain why the sale is taxable notwithstanding we resided in the house for 27 months.
You must have either answered one of the questions in the Sale of Home section incorrectly or made a mistake in entering the dates of sale/acquisition or the purchase price/sales price.
Using your dates and numbers in the Sale of Home section on a 2021 Premier desktop edition has the entire gain of the sale excluded from being taxed.
Go back through the Sale of Home section and carefully review all the questions and entries -
- Click on Federal Taxes (Personal using Home and Business)
- Click on Wages and Income (Personal Income using Home and Business)
- Click on I'll choose what I work on (if shown)
- Scroll down to Less Common Income
- On Sale of Home (gain or loss), click the start or update button