Sale of Primary Home that was a Vacation home

Forum|Forum|2 years ago
February 28, 2024
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Turbo Tax Premier doesn't seem to be calculating my primary home sale exemption. The home was purchased as a vacation home in November 2014, then became primary residence in May 2021, then was sold in August 2023. When asked the number of days the home was used for other purposes, what do I put? Or is there something else I am doing wrong? The gain is below the exemption threshold, but it is telling me a large part of my gain is taxable. Knowing we used it as primary residence for 2 of the last 5 years, we should have no taxable gain.

Best answer by Vanessa A

Did you enter it as a Sale of a Home or did you enter it in the investment section?

When asked if it was used for anything other than your primary home, this is asking about after you turned it into your primary home, not prior. So, you would say No (if you used it as your primary home and did not rent it out after May of 2021)

Then when you say no, you will be asked if you sold another main home in the last 2 years. If you did not, then you would answer no and you would then on the next screen be told Good News, you don't have to pay any income tax (or it would be reduced if the gain on the home was above the $250k (single) or $500(Married Filing Joint) threshold.

Home Sale Exclusion