2995489
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Attend our Ask the Experts event about Tax Law Changes - One Big Beautiful Bill on Aug 6! >> RSVP NOW!
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

$250K Exclusion on the sale of a house

I sold my 2nd home that I renting out on 05/10/2022. I did not live in the home 2 of the 5 years. So I don't believe I qualify for the $250K exclusion, correct?

 

Also, when I enter the 1099S on Schedule D and Form 4562 Amortization and Depreciation I'm being taxed twice. Should I not report the depreciation for 2022 since this was the year of the sale of property?

 

The home cost was $200K and I sold it for $400K = $200K capital gains I have to pay.

 

So why is the sale being reported as gains on Form 4797 and Sch D which results in being double taxed?

 

Thank you!

 

 

x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

1 Best answer

Accepted Solutions
MonikaK1
Expert Alumni

$250K Exclusion on the sale of a house

You can only exclude up to $250,000 of gain on your principal residence, not a second residence used as a rental.

 

Make the entries to account for the sale transaction in the Rental section of TurboTax. Don't enter the transaction a second time in another section, or the sale will be reported twice. 

 

Please see this TurboTax help article for guidance on reporting the sale of a rental. This tax tips article on managing assets also has useful information.

 

When you report in the Rental section that the property was sold, TurboTax will ask questions to gather the needed information so that it will properly calculate the gain on the sale and the recapture of depreciation. You do report depreciation for the portion of the year that includes the sale.

 

The portion of the gain that represents the recapture of depreciation will be shown as ordinary income on your return, and the rest of the gain is capital gain. This is why you will see amounts on different forms in your return.

 

See this IRS webpage for answers to frequently asked questions about the sale of rental property.

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

2 Replies
MonikaK1
Expert Alumni

$250K Exclusion on the sale of a house

You can only exclude up to $250,000 of gain on your principal residence, not a second residence used as a rental.

 

Make the entries to account for the sale transaction in the Rental section of TurboTax. Don't enter the transaction a second time in another section, or the sale will be reported twice. 

 

Please see this TurboTax help article for guidance on reporting the sale of a rental. This tax tips article on managing assets also has useful information.

 

When you report in the Rental section that the property was sold, TurboTax will ask questions to gather the needed information so that it will properly calculate the gain on the sale and the recapture of depreciation. You do report depreciation for the portion of the year that includes the sale.

 

The portion of the gain that represents the recapture of depreciation will be shown as ordinary income on your return, and the rest of the gain is capital gain. This is why you will see amounts on different forms in your return.

 

See this IRS webpage for answers to frequently asked questions about the sale of rental property.

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

$250K Exclusion on the sale of a house

Thank you!

Unlock tailored help options in your account.

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question