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Entering a home sale exclusion in ProSeries

SOLVEDby IntuitProSeries Basic90Updated September 20, 2021

This article will help you:

  • Enter a home sale exclusion in ProSeries Basic or ProSeries Professional
  • Generate a section 121 exclusions
  • Link rental property to a Home Sale Worksheet
  • Report a home sale from a 1099-S
  • Enter a home sale exclusion when an installment used

Refer to Pub 523 for more information about home sale exclusions.

How do I enter a sale of a home that is eligible for a section 121 exclusion?

Follow these steps to make a copy of the Home Sale Worksheet:

  1. Open the individual tax return.
  2. Press the F6 to bring up Open Forms.
  3. Type sale to select the Home Sale Wks.
  4. Click the OK button to create a copy of the Home Sale Worksheet.
  5. Enter the address of the home sold during the tax year.
  6. Click the Select button to go to this copy of the Home Sale Worksheet.

Follow these steps to enter the sale of a home using the Home Sale Worksheet:

  1. Complete Part I - Gain or (Loss).
    • It may be beneficial to complete the Adjusted Basis of Home Sold Worksheet first. Select the QuickZoom below line 5 to access the Adjusted Basis of Home Sold Worksheet.
  2. Complete Part II - Qualifying for and Electing the Exclusion for Sale of Your Main Home.
  3. Complete Part III - Nonqualified Use and Reduced Maximum Exclusion.
  4. Complete Part IV -Exclusion and Taxable Gain.
    • This includes the applicable fields under the Alternative Minimum Tax Calculation section.

Common questions about entering home sale exclusions

You may not need to report the sale or exchange of your client's main home. If you
must report it, complete Form 8949 before Schedule D.

You should report the sale or exchange of the client's main home on Form 8949 if the client:

  1. Can't exclude all of their gain from income, or
  2. Received a Form 1099-S for the sale or exchange

If a partial exclusion is applied, the 8949 and Schedule D will show the section 121 exclusion automatically. Refer to the Sale of Your Home section on the Instructions for Schedule D for more information.

Follow these steps if you received a 1099-S or you want to force the exclusion to show on the Schedule D and 8949:

  1. Open the Home Sale Worksheet.
  2. Scroll to Part II, Qualifying for and Electing the Exclusion for Sale of Your Main Home.
  3. Scroll down to line 15.
  4. Check the box labeled If you received a Form 1099-S for this sale of you home OR you want to report this sale on your return even when not required, check here.
  1. Open the Schedule E Worksheet.
    • You can do this by pressing F6 and typing EW to select the Schedule E Wks.
  2. Check the H - Complete taxable disposition box, if applicable.
  3. Open the Asset Entry Worksheet for the property. 
    • You can open this worksheet by pressing F6 and typing DEE. Then, select Depr Entry Wks, click OK, and choose Schedule E Wks (Asset Entry Wks).
  4. Under Asset Information, enter the Date acquired, if different from Date in service
  5. Scroll down to the Dispositions section and complete the applicable fields:
    • Date of disposition 
      • Both of the Date of disposition and Date acquired (if different from Date in service) are necessary to determine the depreciation recapture and eligibility for the section 121 exclusion.
    • Report land separately?
      • Only check this box if you entered a sales price for the land.
    • Sales price
    • Expense of sale
  6. Use the Double-click to link sale to Home Sale Worksheet field to link the applicable worksheet.
  7. Go back to the Home Sale Worksheet.
  8. Under Part I, Gain or (Loss), make sure the information pulled from the Asset Entry Worksheet is accurate.
  9. Complete Part II, Qualifying for and Electing the Exclusion for Sale of Your Main Home.
  10. Complete Part III, Nonqualified Use and Reduced Maximum Exclusion.
    • The program will calculate Part IV, Exclusion and Taxable Gain.
    • Recaptured depreciation will flow to Form 4797, which will flow to Schedule D.

If the property was depreciated on an Asset Entry Worksheet, you can link the asset to the Home Sale Worksheet. This will transfer the depreciation to the Home Sale Worksheet. This will also keep the adjusted basis calculation on the Adjusted Basis of Home Sold Worksheet from transferring to the Home Sale Worksheet.

If the property wasn't linked to an Asset Entry Worksheet, go to the Part IV - Exclusion and Taxable Gain section of the Home Sale Worksheet and enter any Depreciation allowed or allowable on the property for periods after May 6, 1997.

Homes using for business purposes or rental properties

If the client was entitled to take depreciation deductions because they used the home for business purposes or as rental property, enter any Depreciation allowed or allowable on the property for periods after May 6, 1997 under Part IV - Exclusion and Taxable Gain. This portion of the gain can't be excluded. You also need to enter any AMT depreciation allowed/allowable on the property after 5/6/1997, under the Alternative Minimum Tax Calculation section. 

 

If depreciation has been claimed on this property and the depreciation for regular tax is different from the depreciation for the Alternative Minimum Tax, use the Adjusted Basis of Home Sold Worksheet to calculate the basis of the home.  

When the filing status is single and the Taxpayer box at the top of the Home Sale Worksheet is checked, you need to make sure all answers in Part II - Qualifying for and Electing the Exclusion for Sale of Your Main Home are applicable to the taxpayer.

In particular, make sure that:

  • Line 11 and line 13 are both unchecked.
  • Line 16 is unchecked, if appropriate.

If the home was used in a trade or business:

  1. Open the Asset Entry Worksheet for the home.
  2. Complete the Disposition section.
  3. In the Dispositions section on the Double click to link sale to Home Sale Worksheet field link this asset to the Home Sale Worksheet.
  4. Open the Home Sale Worksheet.
  5. Complete the rest of the disposition information on the Home Sale Worksheet.
  6. On line 18a check the box.
  7. On line 18b double-click to link this Home Sale Worksheet to the 6252.
  8. Complete Form 6252

If the home wasn't used in a trade or business:

  1. Complete the Home Sale Worksheet.
  2. On line 18a check the box.
  3. On line 18b double-click to link this Home Sale Worksheet to the 6252.
  4. Complete Form 6252.

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