Tax Year Prior to 2020: Received letter from IRS saying that house sale in 2015 was not captured on the 2016 filing. How do I correct?

You will have to amend your return to include it.  Reporting your home sale is required if you used it for business, rented it, or received a Form 1099-S.  That doesn't mean it's taxable, however.  When you report your home sale, there will be a space in the software to enter the date sold, Selling Price, and Sales Expenses.  You can deduct the items listed below in Sales Expenses. You cannot deduct normal maintenance items, but you can deduct expenses to prepare the home for sale.

Where to enter the sale of your home  (if required) in TurboTax: While inside the software and working on your return, type sale of home in the Search at the top of the screen (you may see a magnifying glass there).  There will be a popup that says Jump to sale of home.  Select that to get to the general area. 

Sales expenses are listed in the sellers column of your settlement statement and include:

• commissions
• appraisal fees
• broker's fees
• legal fees
• advertising fees
• home inspection reports
• title insurance
• transfer taxes or fees
• geological surveys
• loan charges (points) or other fees paid on the buyer's behalf
• any fees for a service that helped you sell your home without a broker (listing fees, promotional fliers, etc.) 

Sales expenses do not include:

• mortgage payoffs
• home equity loan payoffs
• rent-back costs
• payoff to creditors
• property taxes
• home owner association fees

Is the Sale of My Main Home Taxable?

https://ttlc.intuit.com/replies/3300213

Amending is done on Form 1040X.  Also, if your return is accepted, you should not try to amend your return until it has been fully processed and you have received your refund or your payment has cleared.

Amended returns have to be printed and filed by mail.  It can take the IRS up to 12 weeks or longer to process them.   If you are due a larger refund than on your original return, your amended return should only show the difference and you will receive a separate check for it.  If you owe money on your amended return, it will show only the new amount owed, you will have to mail a check with the return.

How to Amend?

https://ttlc.intuit.com/replies/3288565