Sale of Primary Residence
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Level 1

Sale of Primary Residence

I bought my primary residence in 2014.  I lived in it for 3 years and then moved temporarily so I rented it to a friend for a year and a half.  From all that I have read I clearly qualify to not pay taxes on the sale.  I made about 20k on the sale.  When I answer the questions in Turbotax it is making me pay taxes.  The questions are very hard to understand and I've even gone through and answered differently.  No matter how I answer I can't get the system to not take out tax.  Please help.

4 Replies
Level 1

Sale of Primary Residence

Ok I figured it out.  I looked at some other posts on here that said if you delete the entry and re-input then it will work.  I went and deleted the Home Sale and then re-entered and it worked.  No taxes are being taken out.  This seems more like an IT issue than an issue of how you answer the questions.

 

If you are having trouble with your Home Sale, delete the entire entry and then re-add.

Expert Alumni

Sale of Primary Residence

You do qualify to exclude part of the gain on your home, but because you rented it out for a while, you can't exclude all of it. 

 

When you sell a home that was rented out, or that was depreciated for another reason like a home office, the amount of gain due to the depreciation taken, or allowed to be taken, is taxable income.  

 

The rest of your gain can be excluded from tax because you lived in the home for at least two of the five years  prior to the sale. 

 

If you rented the home out during 2019, use the Assets/  Depreciation section of the Rental Income section to report the sale. 

  1. Select Federal from the left side menu.
  2. Scroll down to Rental Properties and Royalties.
  3. Click Edit/Add to the right.
  4. Continue through the next two screens.
  5. At the Rental and Royalty Summary, click Edit to the right of your rental.
  6. From the Rental Summary, select  Assets/ Depreciation.
  7. Click Update to the right.
  8. Answer the first question Yes.
  9. Click Edit to the right of your rental.

Watch for the checkbox to show you sold the property and answer all of the follow up questions.
 

If you did not rent the home out during 2019, you can use the Sale of Home section to report the sale. 

  1. Use the search box toward the upper left to search for, Sale of home.
  2. Click on Jump to sale of home.
  3. Answer all of the questions in the section.
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Level 1

Sale of Primary Residence

I filed my taxes before I saw this reply. What should I do now? Wait for them to review my return? 

Expert Alumni

Sale of Primary Residence

If you received a Form 1099-S, Proceeds from Real Estate Transactions you will have to report the sale of your primary home.  You should wait until the IRS processes your tax return.  When that is completed then you may file an amended tax return if you received a Form 1099-S.

 

If you have to file an amended return follow these steps:

 

  • If the return is rejected you will correct the error that caused the rejection, report the sale of your primary home and refile the return.    
  • If the return was accepted by the IRS then you will have to file an amended tax return using Form 1040X to report the sale of your primary home.  

This link to the TurboTax Help page  How to amend (change or correct) a return you already filed provides information on how to amend your tax return.   

 

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