Home Sale Gain Exclusion not recognized by TurboTax

Forum|Forum|1 year ago
April 14, 2025
3 replies
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Married filing Jointly.
Has been primary and only home since 2009.
No prior deductions/depreciation and no expense for home office. No rental income.

Purchase of home at $402,000 in 2009

Sale of home for $935,000 in 2024.

After expenses, gain of $488,500.

Turbo tax states the gain is NOT eligible for the exclusion. I have reviewed the sheet and find no issues.

Forms

SharonD007

You may not have to pay taxes on the profits (up to $250,000 or $500,000 if MFJ) if you meet certain conditions.

The three tests that you must meet are:

Ownership - You must have owned your home for at least two of the five years before you sell your home.
Use - You must have used your home as a personal residence for at least two of the five years prior to the date that you sell your home.
Timing - You can't exclude the gain of another principal residence that you sold within two years of the current sale.

If you meet these requirements, you don't have to pay taxes on the first $250,000 (500,000 if you are married and file a joint tax return). If your profit is more than $250,000 ($500,000 if MFJ) then, the excess is reported on Schedule D as a capital gain.

For additional information, refer to the TurboTax article Tax Aspects of Home Ownership: Selling a Home and the IRS article Topic no. 701, Sale of your home.

Try deleting your home sale and re-entering it. Refer to the TurboTax Help article: Where do I enter Form 1099-S? for navigation instructions for TurboTax Online and TurboTax Desktop,

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JonayersAuthor

We meet all requirements for the exclusion.

I read up on others having the same problem and found a suggestion to restart TurboTax, clear out cache data, etc., which I did.

I restarted TurboTax and it is NOW recognizing I am eligible for the exclusion.

TurboTax has been very FRUSTRATING this year over past years.

vanidosa27

This is an error on TTO side. Can you delete the 1099-S and re-enter? Other option would be to download Desktop which is cheaper and go into the gain exclusion worksheet and correct question 14. The question is Did you or your spouse if filing jointly own and use the property as your main home for a total of at least 2 years of the 5-year period before the sale?

I walked thru the interview questions twice and the error cleared.

vanidosa27

Also walking thru the 1099-S interview twice may clear the error. But I can see on the back end in forms mode where the system is not picking up the answer to question 14.