The provision for rolling over the gain on the sale of a new home went out of the statute in the early 1990's.
Now, for
the sale of a residence, up to $250,000 ($500,000 on a joint return where you
both lived in the residence) of gain can be excluded from income if you lived
in and owned the house for two of the last five years. (You may have a smaller
exclusion if the property was used as a rental during the five year period, and
you may have income from recapture of depreciation if you claimed an office in
the home deduction for the home.)
If
you work through the interview on sale of a residence, TurboTax will compute
the exclusion. Look under the wages and income tab for less common income, then
sale of home.
I
would only report the sale if:
- The gain
exceeds the amounts that are exempt from tax, or
- You
received a Form 1099-S from the closing agent.
A closing agent can get an affidavit or
statement from you that the sale meets the requirements for exclusion and, if
so, not send a Form 1099-S reporting the sale. If the gain is fully excludible
and you don't get a Form 1099-S, there is no reason to report the sale on your
tax return. If you do need to report it, use the following sequence:
- Federal Taxes, then
- Wages and income, then
- Choose what to work on, then
- Choose less common income, then
- Home Sale
