How do I exclude gain from sale of vacation home due to death of co-owner?

[CVTS]

Homesale Worksheet Section B, checked yes for Unforeseen Circumstances but ProSeries is still calculating capital gain.

[Just-Lisa-Now-]

Even with the stepped up basis for the co-owner that died?

[sjrcpa]

There is no exlusion if there is a gain on the sale of a second home.

[CVTS]

Thank you

[CVTS]

Just Lisa Now - So the setup for the owner that died would be FMV, correct?

[sjrcpa]

times that owner's percent of ownership.

[CVTS]

thank you

[TaxGuyBill · Accepted solution]

As Susan pointed out, the "Unforeseen Circumstances" is for the sale of a home that was the taxpayer's Principal Residence, but that taxpayer used it for less than the required 2 years due to "Unforeseen Circumstances".

Was this home the taxpayer's Principal Residence?  If not, it does not qualify for an exclusion.