Does TurboTax Deluxe offer clear instructions on capital gains from a home sale? Example: Does it walk me through how to calculate & record base cost?

[MonikaK1 · Accepted solution]

Yes, TurboTax provides instructions both in-program and in help and tips articles regarding capital gains from a home sale, including how to calculate basis and where to report it.

In many cases, users don't need to report the home sale on their return if they qualified for full exclusion from gain and didn't receive a Form 1099-S.

You won't pay taxes on the first $250,000 (also known as a gain) you make from the sale of your home (or the first $500,000 if you're Married Filing Jointly).

That income is free and clear as long as:

• You owned the home.
• It was your main home for two years or more within the five years leading up to the sale.
• You waited at least two years between selling your primary home and excluding your first $250,000 or $500,000 from taxes. In other words, you may buy and sell as many primary homes as you'd like, but you'll only get this tax benefit every two years.

TurboTax will show you if your home sale is taxable by following the instructions provided (TurboTax Online):

1. Open or continue your return in TurboTax.
2. Search for home sale.
3. Select the Jump to link in the search results.
4. Answer Yes to Did you sell or have your home foreclosed in 2023? on the Sale of Your Main Home screen.
5. Follow the instructions to enter your info.

Please see this TurboTax tips article and this TurboTax help article for more details. 

[VolvoGirl]

I think that's only in the Desktop Deluxe program.  For Online you need Premium to enter Capital Gains.  

[DoninGA]

There will be a section on the sale of the home that will ask you what the Adjusted Basis is for the home that was sold.  There is an Easy Guide function for Adjusted Basis in the Premier desktop edition to help you calculate Adjusted Basis, not sure if it is in the Deluxe desktop edition.  It is also available in the Premium online edition but not sure if it is in the Deluxe online edition.

I do know that if you have to report the sale on your tax return, either because you have capital gains owed or you received a Form 1099-S for the sale you will have to use the Premium online edition.

If you sold your primary personal residence and you lived in and owned the home for at least two years in the five year period on the date of sale, you do not have to report the sale if your gains are less then the exclusion amounts of $250,000 if filing Single or $500,000 if filing Married Filing Jointly (and both lived in the home for two years).

Gain or Loss = Sales Price minus Sales Expenses minus Adjusted Basis (Purchase Price plus the cost of improvements prior to the sale)

If you had a gain greater then the exclusion amounts then you would have to report the sale. Also, if you received a Form 1099-S for the sale either with a gain or a loss, the sale has to be reported. You will need the online TurboTax Premium edition to report the sale if you are using the online editions. Make sure that you indicate that you want the sale of the home reported on your tax return.

[mjm77]

Can I use the Home and Business edition to calculate capital gains on sale of home?

[DoninGA]

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@mjm77 wrote:

Can I use the Home and Business edition to calculate capital gains on sale of home?

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If you sold your primary personal residence and you lived in and owned the home for at least two years in the five year period on the date of sale, you do not have to report the sale if your gains are less then the exclusion amounts of $250,000 if filing Single or $500,000 if filing Married Filing Jointly (and both lived in the home for two years).

Gain or Loss = Sales Price minus Sales Expenses minus Adjusted Basis (Purchase Price plus the cost of improvements prior to the sale)

Selling cost can include escrow fees, legal fees, real estate agent commissions, advertising costs, and even home staging fees.

If you had a gain greater then the exclusion amounts then you would have to report the sale. Also, if you received a Form 1099-S for the sale either with a gain or a loss, the sale has to be reported. You will need the online TurboTax Premium edition to report the sale if you are using the online editions. Make sure that you indicate that you want the sale of the home reported on your tax return.

Click on Federal Taxes (Personal using Home and Business)
Click on Wages and Income (Personal Income using Home and Business)
Click on I'll choose what I work on (if shown)
Scroll down to Less Common Income
On Sale of Home (gain or loss), click the start or update button

Or enter sale of home in the Search box located in the upper right of the program screen. Click on Jump to sale of home