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I'm doing my taxes today using TurboTax Premier, but I'm…

Hi Pearl: I'm doing...

Hi Pearl: I'm doing my taxes today using TurboTax Premier, but I'm having trouble with the 593-C and -E forms. Can you assist?

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

I'll try to make it brief: My husband passed away in May 2014. Nine months later, in February 2015, I moved back into what had been our rental house, and put our primary residence up for sale. In April of 2017, I sold our former primary residence after two years of holding it as a rental property. My estate attorney filled out the 593-C and -E forms at time of sale, and is showing I can claim the primary residence as my primary residence for tax purposes and should owe no capital gains on the sale; however, when I attempt to enter the data into TurboTax, it is showing I owe capital gains of nearly $3,000. Help . . .

Accountant's Assistant: Is there anything else important you think the Accountant should know?

I lived in our primary residence for two of the five years immediately preceding the sale. ok, thanks.

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Customer reply replied 1 month ago
Hello?
Answered in 2 minutes by:
3/10/2018
emc011075
emc011075, Tax adviser
Category: Tax
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Experience: IRS licensed Enrolled Agent and tax instructor
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Hi. My name is ***** ***** I will be happy to help you.

You can exclude the capital gains but you cannot exclude depreciation recapture. Most likely that's what the turbo tax is calculating.

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Customer reply replied 1 month ago
I see. Thanks for clarifying!

When you use your house as income producing property you take annual depreciation deduction. If you sell the house for more than what you paid for, minus the depreciation you have to claim all or some of the depreciation you took as income.

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