House sale

[Shirley79]

I sold my house that I used 10% for income tax business for 19 years.  Depreciation taken through the years was $11,564. 

Can someone give me step by step instructions - and on what forms - as to how to report the sale and recapture only the depreciation.  The home qualifies for the $250,000 exclusion.

[TaxGuyBill]

Was the office used (and depreciated) in the year of the sale?

[Shirley79]

Yes

[TaxGuyBill]

Do you want to do it the way the IRS Instructions tell you or do you want to do it the way ProSeries (and TurboTax) wants you do it?

The ProSeries/TurboTax way (which is contrary to the IRS Instructions):  On the Asset Entry Worksheet, go down to the disposition section.  I think you should be able to fill out the information about the sale there.  Then in that same disposition section, you can 'link' it to the "Home Sale Worksheet".  Then you can fill out the rest of the Home Sale Worksheet to qualify for the exclusion.

It should show up on 8949/Schedule D and the Unrecaptured Section 1250 gain should show up on line 19-ish of Schedule D.

The IRS Instructions tell you to report the sale and exclusion on Form 4797.  ProSeries is not set up to do it there so you would need to manually fill it out (see the top of the 4797 and/or the "Enterable 4797").  But then you would also need to manually figure out and enter if the sale affects any other business aspects, such as Home Office limits, QBI, etc.

[Shirley79]

I plan to use Pro Series.

Do I enter 10% (business use) of the sales price or the full sales price?

I really appreciate your help.

[Terry53029 · Accepted solution]

In ProSeries on the asset worksheet for home office, just put date. No sale price, and only report sale price on home sale worksheet. That way you are not reporting business use, and main home sale separately. You would only use form 4797 if you are reporting business use, and personal use separately. That is why ProSeries does not have you put the sale price on the home office asset worksheet. 

[Shirley79]

On the home sale worksheet, do I enter the full price of the sale instead of the 10% used for business?

[Terry53029]

Full price. Don't over complicate just answer each question. ProSeries will take care of deprecation recapture

[Shirley79]

Got it.  Thank you so much.