Always check the prior year’s tax documents for carryover losses. If we did the return last year, it should appear correctly.
Tax Slayer entry:
Federal Section > Income > Capital Gain and Losses (Schedule D)
Capital Gains and Loss Items:
- Each transaction (or “various”) if a group of transactions must be entered individually.
- There is no need to enter the Form 8949 A-F transaction codes. Appropriate questions will produce the codes as the return is produced.
- TaxSlayer has no provision for type A and D transaction totals to be entered directly on Schedule D.
Using summaries from a broker statement:
If the number of sales transactions exceed about 10 and the amounts are summarized by A-F types and short-term and long-term totals:
- If ACA exemption testing will be required, enter gain and loss totals as separate entries so that TaxSlayer can do Gross Income tests correctly.
- Make a copy of (or scan) the broker summary and detailed transaction list pages to submit to the IRS. Not required if all are reported to the IRS (type A or D). Up to 5 documents at 5 Mb each can be attached.
Attach scan at the Federal Section > Income > Capital Gain and Losses > PDF Attachments TS page.
- Tax-Aide is no longer required to submit Form 8453 with broker statement and relevant 8949 pages. Advise the taxpayer to retain copies.
Other Captial Gains Data
- Check the previous year tax return for any short or long carryover losses to enter here.
Sale of Main Home Worksheet:
- ☣ SOFTWARE ERROR – Do not use the TaxSlayer worksheet. It does not carry to the Form 8949 correctly at this time.
- Enter the sale as a short-term or long-term capital gain with basis not reported to the IRS.
- Reduce the gain by the exclusion amount, but not more than the gain (i.e., loss not allowed)
- Choose adjustment codes “E” and “H” to indicate a home sale with an exclusion.
- See the Sale of Home Scoping Decision Tree to determine if the sale of the home is in scope.
- See the Buying and Selling a Home web page for items on the HUD-1 statement that affect basis or may be deductible. The worksheet has pages that will ask for entry of various purchase and selling expenses and improvements made, etc.
- If it’s the main home, lived in 2 of the last 5 years, the gain is less than the $250K/$500K exclusion and there is no 1099-B or 1099-S, the sale can be ignored.
- The exclusion, once used, cannot be used again for 2 years.
- If widowed, figure one half the value of the home at the death of the spouse and increase the basis at that time by that amount. Then add in any capital improvements made since that time to figure the new basis. If sold within 2 years of the spouse’s death, the full $500K exclusion can be used. See Pub 523 for a worksheet to help figure the gain or loss.
- If the sale price of the home is more than the exclusion amount, consult with your local coordinator to help determine if the sale is in scope.
- Note: moving expenses are OUT OF SCOPE unless certified for Military.
- If the client took the First-Time Homebuyer credit in 2008,
- a form 5405 is required for each of the TP and SP if the credit was taken in 2008 on a joint return
- the remaining unpaid portion will have to be repaid unless:
- The home was destroyed or condemned, or disposed of under threat of condemnation and a new home was not acquired within 2 years of the event, or
- TP/SP is military/Foreign Service/intelligence and received government orders to serve on qualified official extended duty. (OUT OF SCOPE unless certified for Military)