House was purchased with father as joint tenancy. Primary residence for son but not the father. House was sold prior to being held for one year. How to report?

[canisgw]

Son and father made major renovations since house was unsaleable as is.

[Coleen3 · Accepted solution]

Since this was not the primary home for either of you for at least two years, there is no exclusion of the gain. You will each share the gain. Start with cost, add improvements and expenses of sale and compare it to the sales price for gain. If it was a 50/50 share, then divide these amounts in half and each take your portion on your individual returns.

Report the sale in the investment section of TurboTax. Follow these instructions:

1. Open your return in TurboTax.
   (To do this, sign in to TurboTax and click the orange Take me to my return button.)
2. In the search box, search for sold second home (use this exact phrase) and then click the "Jump to" link in the search results.
3. Answer Yes on the Did You Sell Any Investments in 2017? screen.

• If you land on the Here's the investment sales info we have so far screen, click Add More Sales.

Answer No to the 1099-B question.

On the next screen, select Second Home (choose this also for inherited homes) or Land. Click Continue.

Follow the on-screen instructions to completion.

Note: Whether you had a loan on the property or how much cash you received at closing doesn't matter to the IRS. The IRS will tax you on the profit from the sale, if any.

In simple terms, the Gross Proceeds minus Expense of Sale (if needed) minus Original Purchase Price minus Improvements (expenses for new roof, kitchen remodel, etc.) equals Your Taxable Profit.

TurboTax will ask you all the necessary questions to determine if you have a profit or loss on the sale.

[canisgw]

Thank you!

[Coleen3]

My pleasure!