Sold home in 2018 and made a profit. Turbotax asks me for information when we purchased the home so I plug that in then it tells me we took a loss on the sale... huh?

[akronsma51]

Originally purchased home in 2015.

We sold it in 2018. So it asked me for sale of the home ($145,445.19) and sales expenses ($103,346.40) so we profited $42,098.79.

So i proceed past that page and it takes me to "tell us about the purchase of your home."

And it asked me for the adjusted cost basis of your home and the date bought or acquired so I am guessing this was when I bought the home originally in June 2015.  I bought the home that year for $96,000.  But then after I click continue it says "no exclusion you have a loss on the sale of your home of $53,901.  Personal loss are not deductible.

What am I doing wrong???

[KrisD]

 The sales expenses is just closing cost. $103,346.40 closing costs including commission does not sound right. 

[akronsma51]

Oh the 103,346.40 was the amount on the settlement statement under "debit".  Closing costs were just $11,304.94

[KrisD]

So you made a profit, but if you meet the requirements for the exclusion on personal residence, you will not need to claim that profit as income. The profit will not be taxed.

[akronsma51]

Oh I thought selling your home you'd get money back on your tax return as well.  We also purchased a new home last year.  Would that go under deductions??

[KrisD]

No, there is no tax break or credit for selling your home. If you buy a house as an investment and sell it at a profit, you are taxed on the profit. But if it is your primary residence and (among other things) you live in it at lease 2 of the last 5 years, you can take the exclusion and not be taxed on the profit. Buying a house in itself is not a deduction,although you are able to deduct some closing costs, points, and interest. BUT those deductions will only benefit you if you itemize (use schedule A).

[akronsma51]

Okay thanks.. So after I added all the information of the sale of our house I owed nothing.  But in order to plug the information in Turbotax told me I had to upgrade to premium or whatever.  You were saying I dont have to claim it as profit so does that mean I can leave it off my tax return all together so I dont have to pay the $50-60 upgrade fee to upgrade my turbo tax?

[KrisD]

Although there is no tax, you should have gotten a 1099-S and that needs to be reported. If you don't upgrade and enter that form, there will be no penalty, but the IRS could contact you about it and communicating with the IRS can be a headache.