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What you did with the gain on the sale of the home is no longer relevant.
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
The proceeds from the sale of your main home are reported on Form 1099-S. You will report the sale on the Sale of Home screen under Wages & Income.
For TurboTax Online
Refer to the TurboTax Help article: Where do I enter Form 1099-S? for navigation instructions for TurboTax Online and TurboTax Desktop.
You may not have to pay taxes on the profits (up to $250,000 or $500,000 if MFJ) if you meet certain conditions.
The three tests that you must meet are:
If you meet these requirements, you don't have to pay taxes on the first $250,000 (500,000 if you are married and file a joint tax return). If your profit is more than $250,000 ($500,000 if MFJ) then, the excess is reported on Schedule D as a capital gain.
For additional information, refer to the TurboTax article Tax Aspects of Home Ownership: Selling a Home and the IRS article Topic no. 701, Sale of your home.
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