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Hi from just answer. I'mCustomer I'll assist.
Even if you sold your home, you don't have a taxable gain if you lived in it for more than 2 years of the last 5. You qualify for the exclusion.
You should not have to even file a tax return unless you received a 1099-S reporting the gross proceeds of the sale.
If you received a 1099-S about your home sale, you will still be reporting $0 income on the 1040. Since your other income is taxfree, even though you might have to file, you will be reporting $0 income.
This filing will NOT affect your child's financial aid, especially since you are not claiming her as a dependent. She likely applies for financial aid as an independent person, which excludes your income from review.
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None taken. I did see something to correct.
Independent students have to be age 24 or older. My error.
Your claiming your daughter as a dependent or not has NO impact on her financial aid application.
I stand by the rest of my response, which would indicate you file a tax return with $0 on the line for capital gains on the sale of your home, and $0 for taxable social security. You only need to file if you were given a 1099-S for the sale proceeds, because IRS will want to see that you report the sale. There should not be any taxable gain, so report $0 for the gain on the sale.
If you still have issues with my response, please advise.