taxable income under 45k with capital gains

[cindyropp]

I am medically retired, single, with taxable income from government pensions of under $45k

If I understand the rules correctly, I am except from paying any capital gains if my taxable income is under about $45k

I bought the house for $485, put $140k into it, sold for $900k  paid $35000 in realtor fees then $15k in moving out of state, $9000 in mortgage expenses, $5k in medical

will turbotax premium be set up to realize this rule for low income??

[DoninGA]

TurboTax is required to follow all the tax codes in place by the Internal Revenue Service.  If you are not eligible for capital gains taxes based on your total income, then TurboTax will handle that on your tax return.

Note - Moving expenses are not reported on a federal tax return due to the tax code changes in effect for tax years 2018 thru 2025, except for military personnel.  Mortgage interest and medical expenses are only deductible as itemized deductions.  The total of all itemized deductions must be greater than the Standard Deduction for your filing status to have any affect on your taxes.

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

Gain or Loss = Sales Price minus Sales Expenses minus Adjusted Basis (Purchase Price plus the cost of improvements prior to the sale)

If you had a gain greater then the exclusion amounts then you would have to report the sale. Also, if you received a Form 1099-S for the sale either with a gain or a loss, the sale has to be reported. You will need the online TurboTax Premium edition to report the sale if you are using the online editions. Make sure that you indicate that you want the sale of the home reported on your tax return.

Click on Federal Taxes (Personal using Home and Business)
Click on Wages and Income (Personal Income using Home and Business)
Click on I'll choose what I work on (if shown)
Scroll down to Less Common Income
On Sale of Home (gain or loss), click the start or update button

Or enter sale of home in the Search box located in the upper right of the program screen. Click on Jump to sale of home

[rjs]

IF the house that you are selling is your primary home, and you have owned it for more than a year, you will not have to pay any tax on the gain if your taxable income, including the gain on the house, is $44,625 or less (for 2023).

Using your figures, your basis for the house is $485,000 plus $140,000 of improvements, which comes to $625,000. So your capital gain is $900,000 - $625,000 = $275,000. If the $35,000 is a broker's commission, that's a selling expense which reduces your gain to $240,000. If you have owned and lived in the house for at least 2 out of the last 5 years before you sell it, you would probably qualify for an exclusion of gain up to $250,000. That means you can exclude the entire gain from your taxable income, regardless of how much other income you have. So you don't have to pay tax on any of the gain from selling the house, and the rates on long-term capital gain don't even come into the picture.

Moving expenses, mortgage interest, and medical expenses do not affect the amount of gain on the sale of the house.

TurboTax will figure this all out for you.

[rjs]

If the house that you are selling is not your primary home, neither of the preceding answers applies. Post more details about what the house was used for, and when (vacation home, rented out, flipping, etc.).