A taxpayer typically owns only one primary residence or main home at a time, and if they sell that home they may be able to exclude a portion of the capital gain from tax. The exclusion is calculated on the Sale of Main Home Worksheet. Click here for more information about completing the worksheet in TaxSlayer Pro.
If they own and reside in more than one residence, they will need to determine which is their main home based on the facts and circumstances. IRS Publication 523, Selling Your Home, provides guidance in determining which home is the main home should there be a question.
A return can include the sale of two main homes, however, when the taxpayer and spouse married during the tax year and both sold their respective primary residences in the tax year. TaxSlayer Pro only allows one Sale of Main Home Worksheet to be completed in a tax return, so the question is how to include the sale of two main homes in the jointly filed tax return? Follow these steps:
1. Prepare the Sale of Main Home Worksheet for the taxpayer.
2. When finished with the worksheet, click Continue to return to the Schedule D Capital Gains menu, then click Continue again to return to the Income menu.
3. In the Income menu, look for the menu line Schedule D/Form 8949 and click the Print icon. This will print the Sale of Main Home Worksheets along with other forms related to Schedule D. Save this PDF for reference purposes.
4. Click the Schedule D/Form 8949 menu, then click Sale of Main Home Worksheet. Click the red trash can icon, then the red Delete button to remove the worksheet.
5. Click +Add sale of home worksheet and prepare it for the spouse. This worksheet will remain in the return, and the exclusion, if any, will flow to Form 8949.
6. When finished with the worksheet, click Continue to return to the Schedule D Capital Gains menu. In this menu select Stocks, Mutual Funds, Cryptocurrency, Collectibles, etc. to enter the information for the taxpayer's sale of main home as reported on the first Sale of Main Home Worksheet prepared and printed in steps 1 through 3 above:
- Whose form is this? - Select Taxpayer.
- Description of Property - Enter "Main Home Taxpayer".
- Date Acquired - Enter the date the taxpayer purchased the home.
- Date Sold - Enter the date the taxpayer sold the home.
- Sales Price - Enter the sales price (Worksheet 2 line 3).
- Select cost basis type - Choose "Did not receive Form 1099-B".
- Cost - Enter the cost basis (Worksheet 1 line 13).
- Adjustments - Enter as a negative number the exclusion on the taxpayer's Worksheet 2 line 14.
- Click "H - Exclude Some/All of the Gain from the Sale of Your Main Home" in the list of adjustment codes.
When finished, click the CONTINUE button.
Note: This is a guide on entering the sale of two main homes in the TaxSlayer Pro program. This is not intended as tax advice.
Additional Information:
IRS: Publication 523 - Selling Your Home
IRS: Instructions for Form 8949
ProWeb: Form 8949 - Sales and Dispositions of Capital Assets
ProWeb - Excluding Sale of Main Home (Form 1099-S)