Sale of Home

[EER15]

We sold our home last year and decided to rent a home until we decide to buy a new one.  Are the expenses (i.e. broker's fees) deductible?  If so, where in turbo tax do I enter this information?

[DoninGA]

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 expenses/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

[SabrinaD2]

To enter the sale of your main home and related expenses like broker's fees in  *(which are generally deductible) TurboTax, follow these steps:

1.  Open or Continue Your Return:

• Open your TurboTax return or continue where you left off. Be sure you are signed in for link in Step 2 to work

2.  Navigate to the Sale of Home Section:

• TurboTax Online/Mobile: Go to the "Sale of Home" section.
• TurboTax Desktop: Use the search bar (magnifying glass icon) and type "sale of home," then select the "Jump to sale of home" link.

3.  Enter Sale Details:

• Answer "Yes" to "Did you sell or have your home foreclosed in 2024?"
• Select "Continue" on the next screen.
• Enter the address of the home you sold and select "Continue."
• Answer "Yes" to "Did you receive a Form 1099-S that reported this sale?" and enter the information from your 1099-S.

4.  Enter Selling Expenses:

• Follow the onscreen instructions to enter the selling expenses, including broker's fees, legal fees, escrow fees, and advertising costs. These expenses are subtracted from the sales price to determine your net gain.

Important Note:

• Profits of up to $250,000 ($500,000 on a joint return) on the sale of your home may not be taxable if it was your primary residence for two of the last five years. TurboTax will ask you questions to determine if you qualify for this exclusion.

* see @DoninGA

[EER15]

I did enter the information in the section you referenced.  The gain was less than the $500K limit (filing jointly).  Are the sales expenses deductible only to lower the gain or can they be deducted elsewhere?  Using Premier edition.

[EER15]

I did as you noted.  Our gain was less than the $500K limit (filing jointly) without the sales expenses.  Are the sales expenses only used to reduce the gain or can they be deducted elsewhere?

[SabrinaD2]

When you sell your home, the sales expenses (such as broker's fees, legal fees, and advertising costs) are deductible only to lower the gain from the sale. These expenses are subtracted from the sales price to determine your net gain, which helps reduce your capital gains.  See IRS  Publication 523,