Question

Does Turbo Tax take into account a home sale profit exemption?

Forum|Forum|2 years ago
October 25, 2023
1 reply
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Hello,

Does Turbo tax automatically calculate/offer the Home Sale Profit exception?

I lived in the home sold for 5 years prior to selling & moving to another state.

We profited less than the $500,000 limit for married couples, so the exception applies, but I would like clarification on how to enter/make sure the exemption is in effect when I use Turbo Tax to file &/or if Turbo tax will automatically apply/offer/select the exemption when I go to file.

Ask the Experts - Extension - Sept 2023

M

marianne

Hello feuerbright!

Thank you for participating today!!

As I understand your question, you would like to make sure TurboTax accounts for the home sale exemption correctly and automatically?

The short answer to your question is, yes, TurboTax software (either online of desktop version) will ask you a series of questions on the Sale of Home screen.

Based on your answers, TurboTax will calculate your exemption. The software will ask you questions such as: if you lived in the home for 2 of the last 5 years as your primary residence, your basis in the home, the sale price of the home and of course all the dates of purchase and sale. The software will also ask about sale of home expenses and any increases to the basis of your home since you bought it. An example may be that you added a new roof or addition. That would increase your basis.

After inputting your information, TurboTax will do the calculation and let you know the results on the screen.

Something else to consider is if you ever rented the home or had a home office deduction. That makes things a bit more complicated, but the software will guide you through the process.