Do I need to file a schedule D?

Turbotax requests that you upgrade because until you go through the interview, the program doesn't know you don't need Premier.  (And yes, it would be better if they determined that first.)

I would only report the sale (and upgrade to Premier) if:

• The gain exceeds the amounts that are exempt from tax, or
• You received a Form 1099-S from the closing agent.

A closing agent can get an affidavit or statement from you that the sale meets the requirements for exclusion and, if so, not send a Form 1099-S reporting the sale. If the gain is fully excludible and you don't get a Form 1099-S, there is no reason to report the sale on your tax return. If you do need to report it, use the following sequence:

• Federal Taxes, then
• Wages and income, then
• Choose what to work on, then
• Choose less common income, then
• Home Sale

For the sale of a residence, up to $250,000 ($500,000 on a joint return where you both lived in the residence) of gain can be excluded from income if you lived in and owned the house for two of the last five years. (You may have a smaller exclusion if the property was used as a rental during the five year period, and you may have income from recapture of depreciation if you claimed an office in the home deduction for the home.)