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Joseph_594
New Member

In 2016 we sold one house & purchased another. How easy/difficult is it to do on turbo tax?

 
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Texas Roger
Level 15

In 2016 we sold one house & purchased another. How easy/difficult is it to do on turbo tax?

It should be relatively easy. Here is some information about the gain on the sale of your home:

You may be able to exclude from income any gain up to a limit of $250,000 ($500,000 on a joint return in most cases).

To claim the exclusion, you must meet the ownership and use tests. This means that during the 5-year period ending on the date of the sale, you must have:

Owned the home for at least 2 years (the ownership test), and

Lived in the home as your main home for at least 2 years (the use test).

If you qualify for the capital gain exclusion, you do not have to report the gain on the sale of your personal residence on your federal tax return unless the gain on the sale was greater then the exclusion or you received a Form 1099-S for the sale of the home or your rented it out while you owned it.

See IRS Publication 523 Selling Your Home for more information - http://www.irs.gov/pub/irs-pdf/p523.pdf

If you need to report the sale and use the online product, you would need the Premier version.

For the purchase of the new home:

Most expenses at closing on the purchase or refinance of a home are added to the cost of a home and are not deductible but are added to the cost basis of the home.  There are a few exceptions - the following would be deductible:

1. Interest paid at the time of purchase (the charge at closing would normally be done for interest up to the date of first payment.) This is sometimes included in the 1098 from the new lender.

2. Real estate taxes charged to you and not reimbursed by seller

3. Points or origination fees.  On a refinance they need to be amortized over the life of the loan unless the points were used to improve your main home.

4. Private mortgage insurance costs but, if prepaid, only the amount allocable to this year based on an 84 month amortization.

Title fees, real estate commissions, documentary stamps, credit report costs, costs of an abstract, transfer taxes, attorney fees, etc. are not deductible, but are added to the cost of the property.

The expenses that are deductible would be entered in Federal Taxes, Deductions and Credits under Your Home. You can use the Deluxe version to enter itemized deductions.

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5 Replies
PaulaM
Expert Alumni

In 2016 we sold one house & purchased another. How easy/difficult is it to do on turbo tax?

Is this a primary, second home, rental property?
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Joseph_594
New Member

In 2016 we sold one house & purchased another. How easy/difficult is it to do on turbo tax?

Primary home to new primary home
Texas Roger
Level 15

In 2016 we sold one house & purchased another. How easy/difficult is it to do on turbo tax?

It should be relatively easy. Here is some information about the gain on the sale of your home:

You may be able to exclude from income any gain up to a limit of $250,000 ($500,000 on a joint return in most cases).

To claim the exclusion, you must meet the ownership and use tests. This means that during the 5-year period ending on the date of the sale, you must have:

Owned the home for at least 2 years (the ownership test), and

Lived in the home as your main home for at least 2 years (the use test).

If you qualify for the capital gain exclusion, you do not have to report the gain on the sale of your personal residence on your federal tax return unless the gain on the sale was greater then the exclusion or you received a Form 1099-S for the sale of the home or your rented it out while you owned it.

See IRS Publication 523 Selling Your Home for more information - http://www.irs.gov/pub/irs-pdf/p523.pdf

If you need to report the sale and use the online product, you would need the Premier version.

For the purchase of the new home:

Most expenses at closing on the purchase or refinance of a home are added to the cost of a home and are not deductible but are added to the cost basis of the home.  There are a few exceptions - the following would be deductible:

1. Interest paid at the time of purchase (the charge at closing would normally be done for interest up to the date of first payment.) This is sometimes included in the 1098 from the new lender.

2. Real estate taxes charged to you and not reimbursed by seller

3. Points or origination fees.  On a refinance they need to be amortized over the life of the loan unless the points were used to improve your main home.

4. Private mortgage insurance costs but, if prepaid, only the amount allocable to this year based on an 84 month amortization.

Title fees, real estate commissions, documentary stamps, credit report costs, costs of an abstract, transfer taxes, attorney fees, etc. are not deductible, but are added to the cost of the property.

The expenses that are deductible would be entered in Federal Taxes, Deductions and Credits under Your Home. You can use the Deluxe version to enter itemized deductions.

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Sdbywf
Returning Member

In 2016 we sold one house & purchased another. How easy/difficult is it to do on turbo tax?

AnnetteB6
Expert Alumni

In 2016 we sold one house & purchased another. How easy/difficult is it to do on turbo tax?

Just as was commented by Critter-3 in the thread for the question linked above, if you did not pay the fees out of your own money but they were 'paid' by the lender through the credit, then do not include any of them as part of your calculation.  

 

 

@Sdbywf

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