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allododo
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How does Turbotax calculate Proceeds from sale of principal residence

 
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How does Turbotax calculate Proceeds from sale of principal residence

Proceeds of disposition are the amount of money you received for your property (the selling price). 

However, if you traded in the property to buy a new one, the proceeds of disposition is the amount you received for the trade-in. For example, if you trade in your old car and receive a $4,000 credit toward the new one, the proceeds of disposition is $4,000.

 

You use the Proceed of Disposition to calculate your Capital Gain, which is the following: 

Proceeds of disposition – (adjusted cost base + outlays and expenses) = capital gain or loss

 

NOTE: 

If you sell an asset for more than you paid for it, the profit is called a capital gain. Details of the sale are included in your tax return (Schedule 3) and capital gains tax is usually applied. When you sell your principal residence (the home where you and your family live throughout the year), the details of the sale are still included in your tax return but, in most cases, any profit you’ve made is exempt from capital gains tax except for some cases. 

 

For more information, please see:

 

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