Sold Home & Need Help with the Adjusted Cost Basis EasyGuide

[AbcxyzTT]

I sold my primary residence in 2022, read all of the exclusion rules, and I qualify to excluding the profit from my taxable income.  Despite being well under the threshold for needing to report the sell, I must report the sale on my taxes due to the following conditions:

• The sale was part of a relocation, so I received a 1099-S
• I took the Business Use of Home deduction on a few years that I owned the home

I'm using the "Adjusted Cost Basis EasyGuide" and have several questions:

1. Where exactly can I get the "Depreciation Taken on This Home" amounts from my previous returns?
2. Assuming that the answer to #1 is "Depreciation allowable," the last line of part III on Form 8829 (line 41 in 2017 or line 42 in 2020), if that is the same amount as the form's last line, "Excess casualty losses and depreciation" (line 43 in 2017 or line 44 in 2020), does that mean the depreciation deduction was $0 for that year?
3. In years where I received a K-1 and therefore did not file a Schedule C or Form 8829, would the depreciation deduction was $0 for those years?
4. Four screens after I've reached the "Adjusted Cost Basis EasyGuide Results," there is a "Depreciation After May 6, 1997" screen that asks for the "total amount of depreciation you deducted (or were allowed to deduct) after May 6, 1997. [. . .]  Note: Only report here depreciation that was NOT reported as a separate business sale."  Do I need to enter the same amount as I'd entered on the home business screen or leave it blank?

I'd really appreciate any help I can get on the above 4 questions; I've spent hours searching the internet and TT Community and have not found the answers.  Thank you in advance!

[DianeW777 · Accepted solution]

The answers here should help you move forward to complete your sale of your home.  Let's answer the questions one at a time. 

1. If you did use depreciation on the home office (not the simplified method) then your depreciation will be calculated as follows.
   • Step 1: Total cost of home (do not include the land portion) times the percentage of business use (usually office square feet divided by total square feet).  
   • Step 2: Next, take that figure times the depreciation rate which should be 2.564% for every full year.  Assumes the property was placed in service under the 39 year straight line mid month convention (SLMM).
   • Step 3: For the first year and the last year divide that percentage by the number of months of business use in each year.  Take the total times the same cost basis.  Add the amount from Step 2 & 3 together.  This is your total depreciation used on the home office.
2. Depreciation allowed as a deduction should be counted. If there was a year you were not entitled to the deduction because your business did not have sufficient income to allow the deduction you would not count a depreciation expense for that specific year(s).
   • IRS Publication 946
3. It depends on whether you were reimbursed for a home office expense by the business. If not, that would mean zero for the years you did not use a home office or take the deduction.  
4. If you reported a home office deduction on Schedule C for 2022 - do not indicate it was sold in that section.  You can select that it was removed from service (not sold).

To report the sale of your home use search (upper right) > type sale of home > Click the Jump to... link > begin your entry.  In this area you will use the depreciation expense calculated above for the amount requested in 'after May 6, 1997'.