Solved: How do I claim exemption of sale for primary home
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mw3214
Level 1

How do I claim exemption of sale for primary home

I purchased and lived in my primary home from 11/2015 to 12/19. I purchased another home in 12/19 and moved in finally sold the 1st home in 02/20 as it took time for the buyer to close.  Turbo tax is calculating a capital gain from the sale of the 1st home and including it in my income for 2020.  Is this correct?  How do I claim an exemption or correct this?

1 Best answer

Accepted Solutions
Cynthiad66
Employee Tax Expert

How do I claim exemption of sale for primary home

There are three tests you must meet in order to treat the gain from the sale of your main home as tax-free:

  • Ownership: You must have owned the home for at least two years (730 days or 24 full months) during the five years prior to the date of your sale. It doesn't have to be continuous, nor does it have to be the two years immediately preceding the sale. If you lived in a house for a decade as your primary residence, then rented it out for two years prior to the sale, for example, you would still qualify under this test.
  • Use: You must have used the home you are selling as your principal residence for at least two of the five years prior to the date of sale.
  • Timing: You have not excluded the gain on the sale of another home within two years prior to this sale.

TIP:  Be sure to  carefully answer the interview questions while entering the transaction.

 

Here is how to enter the sale of a Primary Residence.

 

You report the Sale of a personal residence at:
Federal Taxes
Wages & Income
choose I'll choose what I work on, if asked  OR  Jump to Full List
Scroll down to
Less Common Income
on the
Sale of Home line, click start or update
then enter the necessary information in response to the interview

 

Tax Aspects of Selling a Home

 

If you receive an informational income-reporting document such as Form 1099-S, Proceeds From Real Estate Transactions, you must report the sale of the home even if the gain from the sale is excludable. Additionally, you must report the sale of the home if you can't exclude all of your capital gain from income.

View solution in original post

2 Replies
Cynthiad66
Employee Tax Expert

How do I claim exemption of sale for primary home

There are three tests you must meet in order to treat the gain from the sale of your main home as tax-free:

  • Ownership: You must have owned the home for at least two years (730 days or 24 full months) during the five years prior to the date of your sale. It doesn't have to be continuous, nor does it have to be the two years immediately preceding the sale. If you lived in a house for a decade as your primary residence, then rented it out for two years prior to the sale, for example, you would still qualify under this test.
  • Use: You must have used the home you are selling as your principal residence for at least two of the five years prior to the date of sale.
  • Timing: You have not excluded the gain on the sale of another home within two years prior to this sale.

TIP:  Be sure to  carefully answer the interview questions while entering the transaction.

 

Here is how to enter the sale of a Primary Residence.

 

You report the Sale of a personal residence at:
Federal Taxes
Wages & Income
choose I'll choose what I work on, if asked  OR  Jump to Full List
Scroll down to
Less Common Income
on the
Sale of Home line, click start or update
then enter the necessary information in response to the interview

 

Tax Aspects of Selling a Home

 

If you receive an informational income-reporting document such as Form 1099-S, Proceeds From Real Estate Transactions, you must report the sale of the home even if the gain from the sale is excludable. Additionally, you must report the sale of the home if you can't exclude all of your capital gain from income.

View solution in original post

Mike9241
Level 6

How do I claim exemption of sale for primary home

was our gain more than $250,000 if you filed as single.?

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