Question

I sold a home and bought a new one. Turbo only lets me put in what I sold. How do I put in what I bought so I don't have to pay all the earnings on the sold house.

Forum|Forum|2 years ago
February 6, 2024
2 replies
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What do I do to include home buying in my income tax papers?????

TurboTax Deluxe Online

You do not enter the purchase of a home on a tax return.

If you have a gain on the home that is sold you have to pay taxes on the gain on your tax return for the year sold.

For the new home you can enter any mortgage interest paid, any property taxes paid and any points paid on the new loan for the home as itemized deductions on Schedule A.

However, the total of all your itemized deductions on Schedule A must be greater than the standard deduction for your filing status to have any tax benefit.

Standard deductions for 2023

Single - $13,850 add $1,850 if age 65 or older
Married Filing Separately - $13,850 add $1,500 if age 65 or older
Married Filing Jointly - $27,700 add $1,500 for each spouse age 65 or older
Head of Household - $20,800 add $1,850 if age 65 or older

X

xmasbaby0

All you enter about the new house is any mortgage interest paid in 2023, property tax paid in 2023 and loan origination points (and you may or may not have that). Your down payment that came from the "old" house is irrelevant.

Go to Federal> Deductions and Credits> Your Home to enter mortgage interest, property taxes, and loan origination fees (“points”) that you paid in 2023. You should have a 1098 from your mortgage lender that shows this information. Lenders send these in January/early February.

As for the house you sold:

If your gain was more than $250,000 filing Single, or more than $500,000 filing Married Filing Jointly the sale must be reported on your tax return. Whether you re-invested the gain in to another house is irrelevant. If you have a Form 1099-S go to Federal>Wages and Income>Less Common Income>Sale of Home (gain or loss)

If you owned and lived in the home as your primary residence for at least 2 of the last 5 years on the date of the sale, you do not have to report the home sale if the gain is less than $250K filing Single, or less than $500K filing Married Filing Jointly (and you both owned and lived in the home for at least 2 years).

If you are using online TT, you need Premium software to report the 1099-S

NOTE: If you have ever used the home as rental property or claimed a home office, you have more information to enter

Home Ownership

There is not a first time home buyers credit on a Federal return. That ended in 2010. If your state has such as credit, you will be able to enter it when you prepare your state return.

Buying a home is not a guarantee of a big refund. Your deductions for homeownership combined with your other deductions (if any) must exceed your standard deduction to change your tax due or refund. If you purchased your home late in the year, you do not even have a full year of home

ownership deductions.

Your closing costs on your new home are not deductible except for prepaid interest, prepaid property tax or loan origination fees. There are no deductions for appraisal, inspections, title searches, settlement fees. etc.

Your down payment is not deductible.

Your homeowners insurance for fire, hazard, flood, etc. is not deductible for your own home.

Home improvements, repairs, maintenance, etc. for your own home are not deductible.

Homeowners Association (HOA) fees for your own home are not deductible.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

T

tommywhitt

Are these fees, like: closing costs, title searches, settlement/attorney fees., HOI, HOA fees, improvements, etc. -tax deductible when part of our new residence is used for a home office? If so, where does this information get entered into TT?

M

MonikaK1

Nonrecurring closing costs on the sale of real property such as those you listed are not deductible regardless of whether for a personal residence or a business property. They are added to the cost basis of the property.

Improvements that add to the value of the property are also added to basis.

When you have business use of a property, you can deduct depreciation on the building.

If you have regular and exclusive business use of a portion of your home, then visit the home office section of Schedule C. TurboTax will provide step by step instructions to calculate the home office deduction. If you meet the home office qualifications and choose to deduct actual expenses, you would get to deduct a percentage of your utilities, monthly HOA fees, etc.

Your deduction for business use of your home may not exceed your business net income (gross income derived from the qualified business use of the home minus business deductions).

If part of your deduction exceeds your net income for this year, TurboTax will carry the excess over to next year in case you have a larger net profit and can use the rest of the deduction.

Please see this TurboTax article and IRS Publication 587 for more information on the deduction for business use of a home.

@tommywhitt

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