It depends but if you meet the home gain exclusion (see below) and the home was never a rental or no home office deduction was taken, then no income tax reporting requirement is necessary related to your primary home sale.
For selling expenses -
You are allowed to
deduct from the sales price almost any type of selling expenses, provided that
they don’t physically affect the property. Such expenses may include:
- advertising
- appraisal fees
- attorney fees
- closing fees
- document preparation fees
- escrow fees
- mortgage satisfaction fees
- notary fees
- points paid by seller to
obtain financing for buyer
- real estate broker's
commission
- recording fees (if paid by
the seller)
- costs of removing title
clouds
- settlement fees
- title search fees, and
- transfer or stamp taxes
charged by city, county, or state governments
For adjusted basis in the home -
Your adjusted cost basis in the amount you paid for your home plus any capital improvements (made to the home between when you bought it and when you sold it) less any depreciation (related to a home office or rental conversion) less any casualty losses (amounts claimed in a prior year related to a casualty loss). So for example if you originally paid $85,000, and you have no capital improvements, no depreciation recapture or casualty losses, then your adjusted cost basis would be $85,000.
Please note when
you sell a property that was used as a rental, you must pay 25 percent
recapture tax (also referred to as Section 1250 recapture) as well as regular
state income tax on the depreciation you claimed. (Remember the IRS will assume
that you claimed the correct amount of depreciation every year—this is true regardless of whether you
actually claimed any depreciation on your tax return).
See Sale of Your Home for more information on the exclusion.
If this was your primary residence prior to the sale, you may be eligible to exclude the gain under the home gain exclusion.
You can take the gain exclusion as long as you considered the home your "primary residence" for 2 of the last 5 years. If you have a capital gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income. You may qualify to exclude up to $500,000 of that gain if you file a joint return with your spouse.
If you did not use the home as your primary residence for 2 of the last 5 years and meet the home gain exclusion requirements, you may still be eligible for partial exclusion if you can show the main reason you sold your home was because of a change in workplace location, for health reasons, or because of an unforeseeable event
You do not need to enter the sale of your primary residence if:
- You never used your primary residence as a rental or took a home office deduction
- You have a loss on the sale of your home (Personal use capital losses are not reported on your tax return)
- You did not receive a Form 1099-S and
- You meet the home gain exclusion
If you still need to enter your sale of your primary residence, please follow these steps:
- Once you are in your tax return (for TurboTax Online sign-in, click Here), click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
- Next click on “Wages & Income” ("Personal Income" in TurboTax Home & Business)
- Next click on “I’ll choose what I work on”
- Scroll down the screen until to come to the section “Less Common Income”
- Choose “Sale of Home (gain or loss)” and select “start’
- You will want to use the "Easy Guide" to determine the adjusted basis on this home
Say "yes" that you sold your main home and TurboTax will guide you on entering this information. You will need:
- The date you sold your home and the selling price (from your closing statement)
- The date you bought your home and the purchase price (from your closing statement)
- The cost of any major improvements you made, so we can deduct them for you
- Form 1099-C if you sold your home at a loss (short sale)
Just remember to check the box to have your home sale reported on your tax return but ONLY if you receive a 1099-S
