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Level 1
posted Feb 23, 2020 4:36:06 PM

Why is it saying I don't qualify for an exclusion of the gain on the sale of my home. I lived in it for more than two consecutive years.

1 5 1953
5 Replies
Expert Alumni
Feb 23, 2020 4:51:07 PM

The only reason the program would not exclude the gain on the sale of your primary residence is due to one of your entries related to it.  Return to that section and go through the interview again.  If that doesn't work, then delete it and start the sale of your home section over again.

Level 1
Feb 23, 2020 5:02:02 PM

I'm confused about the home office question.  It is asking if I used all or part of my home for any of the following:  home-based business, home office, rental?

For 1-2 years, we used a spare bedroom as an office space for my husband.  We claimed it as an itemized work expense.  Do I answer this question yes?  I think this is what is causing me not to qualify for an exclusion...

Expert Alumni
Feb 23, 2020 5:25:02 PM

Yes, I suspect the home office issue is what has you confounded.

 

Did you see the page Depreciation after May 6, 1997?  

 

Is that where you saw the 'home office' reference?

 

How did you compute the two depreciation numbers?

 

 

Level 1
Feb 23, 2020 5:32:24 PM

The question actually appears twice.  First in the Adjusted cost basis easyguide section and then again in the section Depreciation after May 6, 1997...

 

Why does it ask twice and should I answer the same way both times?

 

You asked, "How did you compute the two depreciation numbers?"  No idea.  How do I do that?

Expert Alumni
Feb 23, 2020 5:52:57 PM

The two depreciation numbers come from your previous years tax returns where you claimed the depreciation expense. 

 

On the 2019 IRS form 8829, the number can be found on line 42 called depreciation allowable.

 

Many times the number you enter will be the same in each box. 

 

Although we expect the gain on the sale of the personal home to be excluded from taxable income, this depreciation will likely be added back and taxed as ordinary income.