Complicated tax year

[charlie39]

Hi,

In 2021, my wife and I sold a home in Salem, VA and moved to Durham, NC. We purchased a Townhome in Durham. After a short period, we decided we did not like the area and decided to move back to Roanoke, VA. We placed the townhome on the market and It sold within two weeks for a profit. We purchased a home in Roanoke and moved in December.

I have used TurboTax Deluxe for years and purchased it recently. I am at a loss to figure out how to work out our tax return situation. Can I still use Deluxe for 2021 or is this to complicated? Please help.

Thank you,

[xmasbaby0]

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[xmasbaby0 · Accepted solution]

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
• .https://ttlc.intuit.com/questions/1901135-i-sold-my-home-at-a-loss-is-this-deductible

[Mike9241]

you report the sale of each house. not complicated at all. the VA house sold qualifies for the $500,000 home sale exclusion if one of you owned it for 2 out of 5 years before sale and both occupied it for two out of 5 years before the sale. the periods do not have to be the same. you can only use the home sale exclusion once every two years (two years between sales)  and any unused home sale exclusion on the first home can not be used on the second. Thus the sale of if the second one is fully taxable unless you can meet one f the following criteria to qualify for a partial exclusion:

1) job change  - the new place of employment is at least 50 miles farther from the residence sold than the former place of employment was or

2) health - to obtain, provide or facilitate the diagnosis, cure, mitigation, or treatment of disease, illness or injury. the sale is not for health if it was merely to benefit general health or well-being.  A doctors recommendation  citing one of the reasons above would be helpful if audited or

3) unforeseen circumstances - in your situation this would likely have to be an event the IRS determines to be an unforeseen circumstance

finally, if the taxpayer does not qualify to use one of the above safe harbors, then the taxpayer may still qualify based on facts and circumstances. factors that may be relevant in determining the PRIMARY reason for the sale include REG 1.121-3(b)

1) home sale and the circumstances causing it were close in time

2) the circumstances causing the sale was during the time the taxpayer owned and occupied the property as their main residence

3) the circumstances causing the sale were not reasonably foreseeable when the taxpayer began using the property as a main home

4) your ability to maintain the home materially changed

5) the suitability of the property as your main home materially changed

6) at all times while owned it was your main home