Home Sale Gain

[blanz23]

I've entered all the information for my home sale and TT is telling me I owe taxes on $4551 of gains. Sold home for 300,000 and had 18k of selling expenses. Adjusted cost basis was 175k. I meet all the exclusion requirements and am well under the 500k exclusion amount for married filing jointly.  Any idea why it's saying I owe?

[AlanT222]

If you sold your personal primary 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 and owned the home for two years).  

[blanz23]

Thank you for your reply.  However, I already knew all of that.  The question is why is TT not handling it correctly.  In the end, I guess I can just delete that information from TT, but it's concerning that TT is unable to handle a fairly basic issue correctly.  

[DoninGA]

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@blanz23 wrote:

Thank you for your reply.  However, I already knew all of that.  The question is why is TT not handling it correctly.  In the end, I guess I can just delete that information from TT, but it's concerning that TT is unable to handle a fairly basic issue correctly.  

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Have you gone over all of your answers, including the dates entered, in the Sale of Home section? 

Did you answer Yes to the question of living in the home for two or more years?  Did you answer No to the question of using the home than anything other then your Primary Home?  Did you answer No where asked if you sold another main home after January 1, 2017?  Did you answer No where asked about depreciation due to having a home office or renting all or part of your home?

The Home Sale section of the TurboTax software has been basically the same for almost twenty years with no reports of any systemic failures.

[blufflady]

TT is doing the exact same thing to me.  I answer all those questions correctly and it still is saying I have a taxable gain.  Very frustrating.  If I don't have to report... I'll leave it blank.  Should not be working this way though. 

[ColeenD3]

@blufflady

Did you at any time rent the property? You have to recapture the depreciation, whether you took it or not.

[blufflady]

yes I have answered all the questions and have not rented the property.   My next test is to see if TT is just not "saving" each answer and populating the form.  If so, I'll definitely let you know of the glitch.  Also, checked this question on IRS.gov.  They say that 'even if you have less than $500,00 (married joint), you MUST report if you received a 1099-S.  I believe you gave an incorrect answer to this earlier.  Thus... I have to find a way to have TT fix this.  

[DoninGA]

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@blufflady wrote:

yes I have answered all the questions and have not rented the property.   My next test is to see if TT is just not "saving" each answer and populating the form.  If so, I'll definitely let you know of the glitch.  Also, checked this question on IRS.gov.  They say that 'even if you have less than $500,00 (married joint), you MUST report if you received a 1099-S.  I believe you gave an incorrect answer to this earlier.  Thus... I have to find a way to have TT fix this.  

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The sale of home section has not changed in at least 20 years.  The calculations and methods to report are correct.

[AmyC]

Yes, you received a 1099-S and must report the sale. @DoninGA in the post above has great examples. From there, you enter the purchase information. Then comes Time You Lived in your Home, YES

You have to have not sold another main home within 2 years of this sale.

The Home Sale Wks will fill out with this information and nothing will go on your actual tax return since it is qualified for the exclusion.

@blufflady

[blufflady]

Well, it may not have changed fo 20 years but I did find the glitch.  I answered all those questions. Repeatedly check them over. Then I dug into the Forms view and found the Form that the questions filled out and couldn't figure out why... scanning all the way to bottom of form.. it came up with "you don't qualify".  I looked carefully at the form again .  BINGO!  At the very, very top of the form there is a question that says "Do you want to take the exclusion for home sales? "    Very simple question.  No checkbox in the Questioning format ever asked that and the box was left unchecked!!! When I checked it, Voila!.  I got the deduction.  Your IT people should check this.