PA exclude qualifying gain on sale of house-meets all qualifications

[werm328]

I have to prepare a PA income tax return Sold house 4/4/24 - purchased 2/1/18 gain 95,598 Lived in house two of the five years preceding the sale-gain should be exempt. All PA property.

He also sold another house 12/12/24-purchased 12/12/24.  There was a loss 39,436. All PA property.

All information from Federal Form 8949 flowed over to sch D. There is no gain on Federal Tax Return

On Pa return there are 2 sch Ds, one for each taxpayer. Same information flowed over 50% for each form. On line 11 there is a net gain.

Form PA-19 Complete Section II and all information relating to the sale which is line 7 and line 12. I prepare 2 PA-19

However, there is a gain and the Taxpayer is taxed at PA Income tax rate of 3.09%.

Help!! What did I do wrong and thank you

[Accountant-Man]

Not too sure, but PA splits all sales 50-50 between spouses if they are coded J. Are gain and loss sales each coded J on the 8949 entries?

Also, only one sale should go on the PA19, not both.

[qbteachmt]

"He also sold another house 12/12/24-purchased 12/12/24. There was a loss 39,436."

You didn't specify if that was investment property or just a bad purchase of personal property, and the loss isn't deductible (for Fed, at least).

[werm328]

This was a personal houses in PA

I also made an error on dates

House A  purchased   2/1/18,  Sold 4/4/24  gain  95,596   met reguirements 2 out of 5 years

House B  purchase  10/14/24  Sold 12/1124      loss  (39395)

Other details, He purchased 2nd house but first house was vacant until he told it on 4/4/24

[werm328]

there are 2 PA 19 for PA

Federal Jointly owned

[Accountant-Man]

One PA 19 for each spouse? The second house doesn't get an exclusion and is a personal loss.

[werm328]

Thank you. How is this transaction entered on Pro Series. Presently there is a gain and the taxpayer is taxed on the first house gain

[werm328]

Federal  to verify  2nd house loss is reduce from gain of sale from first house

Pa  2nd house is just loss 

How is this entered in ProSeries

[qbteachmt]

What is this comment: "Federal to verify 2nd house loss is reduce from gain of sale from first house"

You can't net the two houses. You already had a full exclusion anyway, from the primary residence gain. You can't reduce it more.

[werm328]

I finally got thru to PA Dept of Revenue after trying many times this week.

Her answer is:  He loses the exclusion because he sold the 2nd house 8 months after the sales of the first house.

I thank you for all of your help and information. Pa law is different from Federal law.