Open TurboTax

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
Your taxes, your way. Get expert help or do it yourself. >> Get started
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

cancel
Showing results for 
Search instead for 
Did you mean: 
geoff6
New Member

Sold my home in 2019 for $30,000 profit from 2016 purchase. How do I calculate adjusted basis of home sold?

2016 purchase price $186,000
2019 selling price $217,000
Selling expenses $28,960 (taken from closing documents on new purchase)
3 Replies
VictorW9
Expert Alumni

Sold my home in 2019 for $30,000 profit from 2016 purchase. How do I calculate adjusted basis of home sold?

 Adjusted basis is calculated by taking the original cost of the property, then add the cost of improvements and subtracting any deductions taken for depreciation.

 

Based on the your numbers your profit should be:

 

    Selling price                                    217,000

    Less Selling Expenses                  (  28,960)

    Net Sales                                         188,040

 

 Adjusted basis

    Purchase Price                              (186,000) 

    Profit on the Sale of Home            31,000

 

However, we will need more information to really be of help to your specific situation. For one, you don't seem to own the home for the minimum five year period required for you to be eligible for the exclusion of gain on sale of personal residence. Also, was the property a rental and did you deduct depreciation which may also affect your profit? Also, you may also want to consider other additional improvements made to the property to get a step up on your adjusted basis. Check this Turbo Tax article out for further information. 

 

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
NCperson
Level 15

Sold my home in 2019 for $30,000 profit from 2016 purchase. How do I calculate adjusted basis of home sold?

@VictorW9 - the rule is living in the home for at least two of the last five years.  The rule is not living in the home for 5 years.

 

if the taxpayer has lived in the home for 2 of the last 5 years and the profit is below $250,000, there is no reporting requirement. Since he purchased the home in 2016 and assuming he lived there for 24 of those months between 2016 and 2019, nothing to report on the tax return.

 

Also, the selling expenses are questionable - because the taxpayer states they are on the 'new purchase' which has nothing to do with this sale. 

 

regardless, it's still under $250,000

 

 

VictorW9
Expert Alumni

Sold my home in 2019 for $30,000 profit from 2016 purchase. How do I calculate adjusted basis of home sold?

@NCperson - I stand corrected. The rule is that you have to live in your home for two years for you to qualify for the exclusion of gain on the sale of personal residence. Thank you.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

About Community

Learn about taxes, budgeting, saving, borrowing, reducing debt, investing, and planning for retirement.

3.48m
Members

2.6m
Discussions

Manage cookies
v