Sold house for 380K. I bought for 285K 12 years ago & lived in it all 12. My gain was 95K. Single tax payer. Why is TT telling me I had a gain and have to pay taxes?

[timtg]

I would think that my gain being less than 250K for a single tax payer I would not have to pay taxes on the 95K gain.  Should I have not hit YES sold a house and just moved on?  I hit YES and then filled in the data and got the result of owing a lot of money due to a gain.

[xmasbaby0]

SALE OF HOUSE

If your gain was more than  $250,000 filing Single, or more than $500,000 filing Married Filing Jointly the sale must be reported on your tax return.  Whether you re-invested the gain in to another house is irrelevant.  If you  have a Form 1099-S go to Federal>Wages and Income>Less Common Income>Sale of Home (gain or loss)

If you owned and lived in the home as your primary residence for at least 2 of the last 5 years on the date of the sale, you do not have to report the home sale if the gain is less than $250K filing Single, or less than $500K filing Married Filing Jointly (and you both owned and lived in the home for at least 2 years).

• If you are using online TT, you need Premier or Self-Employed software to report the 1099-S

[Vanessa A]

Yes, you do need to report this income.  You are correct, since you have a gain of less than $250,000 and lived in the house well over the 2 out of the last 5 years, you meet the criteria to exclude up to $250,000 of a gain.

If your taxes due jumped after entering the 1099S, did you enter your cost basis?  If not, and you only entered the sales price, you would have a capital gains of $380k. 

If you did enter the cost basis and sales expenses, go back through and double check your answers to be sure you selected that it was your primary home and that you did NOT use it for any other reason and that you did NOT sell another main home in the last 2 years. 

When you complete those steps, you will get to a screen that says Exclusion of Gain.  Good News!! You don't have to pay any income tax on this sale of your home.