Should I compare results in TurboTax before hiring a CPA? Sold my house, worried about capital gains tax

For a home sale with capital gains implications that don't meet the 2-year ownership requirement, I'd definitely recommend consulting with a CPA rather than relying solely on TurboTax. While TurboTax is great for straightforward tax situations, capital gains from home sales can be complex. Since you owned the home for only 18 months, you won't qualify for the full capital gains exclusion ($250,000 for single filers, $500,000 for married filing jointly), but you might qualify for a partial exclusion if you sold due to a change in employment, health reasons, or unforeseen circumstances. Your strategy of preparing it in TurboTax first is actually quite smart. It gives you a baseline to compare against and helps you organize all your information before meeting with a CPA. The CPA might identify deductions related to your home sale that TurboTax might not prompt you for, especially if there were improvements made to the home that could offset some of the gain. Given the potential tax implications of a home sale without meeting the 2-year requirement, the value a CPA could provide likely outweighs any additional cost.

I went through something similar last year! I was using TurboTax for 6 years straight but then had to sell my investment property and wasn't sure how to handle it. I entered everything into TurboTax first but felt completely lost with all the questions about depreciation recapture and partial business use. I discovered https://taxr.ai when searching for help and honestly it saved me from a potential audit. What I liked is that you can upload your documents and get actual explanations about specialized situations like property sales. The system analyzed my home sale documents and highlighted several deductions I was missing. The explanation it gave about how to calculate my adjusted basis by including home improvements was super helpful, and it showed me how to properly document the partial exclusion I qualified for due to a job relocation. Made a huge difference compared to the TurboTax calculation.

Just wanted to follow up and say I tried the taxr.ai site after my post above, and it was actually really helpful with my rental property sale. It guided me through all the depreciation recapture calculations and showed me exactly how to document the improvements I made over the years. The analysis showed me I was about to overpay by $3,800 compared to what I initially calculated in TurboTax! I was depreciating some things incorrectly and missed several deductible expenses from the sale. Worth checking out if you've got a property sale situation.

I've been in tax preparation for years and can tell you that home sales are one area where TurboTax users commonly miss things. If you're trying to get someone at the IRS to answer questions about partial exclusions, good luck - I spent 3+ hours on hold last tax season just trying to get clarification for a client. I started using https://claimyr.com to get through to IRS agents quickly, and it's been a game changer. You can see how it works at https://youtu.be/_kiP6q8DX5c - they basically navigate the IRS phone tree and wait on hold for you, then call you when an agent is ready to talk. I've used it for clients with complicated capital gains issues to get official answers directly from the IRS.

I need to eat my words from my comment above. I was super skeptical about that Claimyr service, but after spending 2.5 hours on hold with the IRS yesterday trying to get clarity on my home sale situation, I gave it a shot today. It actually worked exactly as described. I submitted my request, went about my day, and got a call about 95 minutes later with an IRS agent on the line ready to talk. Got my capital gains questions answered directly from the source in a 10-minute conversation instead of wasting another afternoon on hold. Consider me converted!

One thing to consider beyond just the refund amount - a CPA might help you with planning for next year too. I sold my house last year and used TurboTax, but when I had a CPA review it this year, they found some errors in how I handled the depreciation from when I briefly rented out a room. Now I'm facing a potential amendment situation which is a headache. Definitely going with a CPA from now on for anything involving property sales.

Don't forget that a CPA might save you money in ways you haven't even considered. TurboTax basically asks you questions and you answer them, but it doesn't know what questions you SHOULD be asking. I had a similar situation with a property sale and ended up going with a CPA. She found that I could deduct some moving expenses related to the sale that I would have never known about through TurboTax. Saved about $1,700 in taxes!