how do i enter the purchase of a second home (not rental) to offset sale of a second home?

Forum|Forum|1 year ago
March 22, 2025
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DoninGA

Employee

If the second home that was sold is not an investment property then you cannot do a 1031 exchange for another property.

The gains on the sale cannot be offset by the purchase of another second home.

portvineAuthor

Just to be sure I understand, we sold a second home we've had for about 4 years. Bought a replacement 2 weeks later. The profit from the sale is taxable? I thought we had 45 days to reinvest?

DianeW777

No, It is a taxable event because a like kind, Section 1031 exchange is not allowed for personal use property. Only property used in a trade or business, such as rental property, is allowed to use the Section 1031 exchange.

IRS Fact Sheet for Section 1031 Exchange

@portvine

[Edited: 03/22/2025 | 1:12 PM PST]

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DianeW777

It is not allowed. If you sell a second home, not your main home, then the sale is taxable using the steps below. The cost of the new second home is not adjusted or offset by the sale of the old second home. See the information from DoninGA as well.

To enter your sale in TurboTax, follow these steps. Click this link for more information. Where do I enter Investment Sales?

Open or continue your return.
Navigate to the investment sales section:
- TurboTax Online/Mobile: Go to investment sales. If using this application, make sure it is open
- TurboTax Desktop: Search for investment sales and then select the Jump to link.
  - Or Personal Tab > Continue > I'll choose what I work on > Scroll to Investment Income > Select Stocks, Cryptocurrency, Mutual Funds, Bonds, Other
Answer Yes to the question Did you sell any of these investments in 2024? (or Okay! to Time to kickoff your investments!).
- If you land on the Investment sales summary or Your investments and savings screen, select Add More Sales or Add investments.