Support CenterHow To Verify if One is Eligible for a Sale of Home Exclusion? - A sale of a house purchased in 2012 and lived on for 4 years and since 2017 they have been renting and depreciating it.https://www.irs.gov/taxtopics/tc701Qualifying for the Exclusion. You're eligible for the exclusion if you have own
🔍 How To Verify if One is Eligible for a Sale of Home Exclusion?
Scenario: A sale of a house purchased in 2012 and lived on for 4 years. Since 2017, they have been renting and depreciating it.
Use this guide to confirm eligibility for the Sale of Home Exclusion and understand how SureFire handles the situation.
⚠️ Before You Begin
IRS eligibility rule (Sale of Home Exclusion): You're eligible for the exclusion if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its date of sale.
Question to verify: Does the taxpayer meet the “owned and used as main home” requirement for at least 2 years within the 5-year period ending on the sale date?
📊 Step-by-Step Guide
Step 1: Record the rental property on the Asset worksheet (if you have not yet done so)
Use this when you need to ensure the rental property is properly set up before disposing of it.
Step 2: Dispose of the asset and add the selling expenses
Use this when you need to capture the sale transaction details so the gain can be calculated.
Step 3: The gain will flow to Form 4797
Use this to confirm where SureFire sends the calculated gain.
Step 4: On the Sch D worksheet 2, report sale of home and complete the entries (including depreciation on line 9)
Use this when you need to enter the sale of home details and include the depreciation on line 9.
Step 5: The gain from the Sch D worksheet 2 will flow to 4797 (you may need to override Form 4797, line 30, page 2)
Use this when the gain calculated on Sch D worksheet 2 needs to be reflected on Form 4797, line 30, page 2.
❌ Note
Depreciation expense will not be excluded from tax
📞 Still Need Help?
If you are having trouble, contact our support team:
Phone: 1-800-516-9442
Tags: federal,form