Where do I find the Form 1040 Sale of Home Worksheet for my primary residence?

The Sale of Home Worksheet isn't actually a separate IRS form you need to download - it's typically integrated into tax software programs like TurboTax to help calculate whether you qualify for the Section 121 exclusion (which lets you exclude up to $250,000 of gain for single filers or $500,000 for married filing jointly). Since you lived in the house for 6 years as your primary residence, you almost certainly qualify for the full exclusion! The requirement is that you owned and used the home as your main residence for at least 2 out of the 5 years before the sale. In TurboTax, you should find this in the "Personal Income" or "Investment Income" section - look for something like "Sale of Home" or "Real Estate Transactions." The program will walk you through all the questions needed to determine your eligibility for the exclusion. You'll need to enter your original purchase price, cost of improvements, and the selling price. With your $78,000 profit and 6-year residence, the entire gain should be excluded from taxation as long as you and your husband file jointly and this was your primary residence.

I just went through this exact situation last month! The software can be a bit confusing to navigate tbh. I found a tool called taxr.ai (https://taxr.ai) that helped me figure out how to properly document my home sale. It basically analyzed my closing documents and showed me exactly what numbers I needed to enter where in TurboTax. The Sale of Home Worksheet isn't a separate form but more like a built-in calculator that tax software uses. The taxr.ai tool was nice because it confirmed I was eligible for the full exclusion (we had a similar profit around $65k) and made sure I reported all my home improvements correctly to maximize my basis. I was actually surprised to learn that some of the renovations we did counted toward increasing our basis! The whole process was way easier than trying to figure it out from random articles online.

Just wanted to follow up - I tried taxr.ai yesterday and it really did make the whole process easier! I had all my documents from when we sold our house last summer and it pulled out all the important numbers instantly. Showed me that our kitchen remodel and bathroom update both increased our basis, which I had no idea about. The best part was how it walked me through exactly where to enter everything in TurboTax. I was worried about making a mistake, but it made it super simple. Our profit was under the $500k limit so everything was excluded just like they said it would be. Definitely recommend if you're confused about home sale reporting like I was!

If you're still trying to straighten out your home sale reporting and need to talk to the IRS, good luck getting through to them. I spent HOURS trying to reach someone about a similar question last week - kept getting the "high call volume" message and disconnects. I finally tried Claimyr (https://claimyr.com) after seeing someone recommend it here. They have this system that basically holds your place in the IRS phone queue and calls you when an agent is actually available. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c I was super skeptical but desperate after wasting an entire afternoon on hold. Used their service and got a call back when an actual IRS agent was on the line. The agent confirmed that I didn't need to file anything special beyond what TurboTax was asking for regarding my home sale. She also explained exactly how the exclusion works for future reference.

Well I need to eat my words. After dismissing Claimyr as probably being a scam, I was still stuck trying to get through to the IRS about my home sale questions. After my fifth disconnection yesterday, I gave in and tried the service. It actually worked exactly as described. I got a call back about 47 minutes later with an IRS agent already on the line. The agent walked me through exactly how to report my home sale in TurboTax and confirmed that my $120k profit was fully excludable since we'd lived in the house for 4 years. I'm still shocked it worked so well. The agent even helped me understand which home improvements should be included in my basis. Would have taken me days to get this information otherwise. Sometimes I hate being wrong, but in this case I'm glad I was!

Don't forget to include all your capital improvements when calculating your basis! We almost missed claiming about $43k in renovations we did over the years (new roof, kitchen remodel, bathroom updates, etc). Those all increase your basis and reduce the taxable gain if you're close to the exclusion limit. TurboTax should have a section for entering these improvements. Make sure you have receipts or documentation though - if you ever get audited, you'll need to prove these expenses.

Does anyone know if TaxAct handles the home sale exclusion the same way as TurboTax? I'm in a similar situation but using different software.

@Hiroshi, based on your situation, you should be in great shape! With 6+ years of primary residence and only $78k in profit, you're well under the $500k exclusion limit for married filing jointly. In TurboTax, look for the "Federal Taxes" section, then "Wages & Income," and you should see "Investment Income" or "Less Common Income." There will be a section for "Stocks, Mutual Funds, Bonds, Other" - click "Start" there and look for "Sale of Your Home" or similar wording. The software will ask you about: - Purchase date and price - Sale date and price - Any major improvements you made - How long you lived there as primary residence Don't stress about finding a separate "worksheet" - TurboTax handles all the calculations behind the scenes using Forms 8949 and Schedule D. Just answer their questions honestly and the software will automatically apply the Section 121 exclusion. One tip: gather receipts for any major home improvements you made over those 6 years (new HVAC, kitchen remodel, roof, flooring, etc.) as these increase your basis and further reduce any potential taxable gain, though you likely won't need them given your numbers. You've got this! The exclusion was designed for exactly your situation.