You can set up a five year reserve for the unrealized (Mortgage Debt) Capital Gain in the sale of your property. Any cash paid will be declared in the year of sale and 1/5 of the reserve will be taken in to income in the year of sale. The remaining 4/5 of the deferred gain will be claimed in equal amounts over the next for tax years.
Calculate the total gain then use the correct Reserve Screen in Turbo Tax (see previous answer for access) to set up the 4/5 reserve amount. When using Turbo Tax in subsequent years make sure that the required amount is included in to income on Line 127 by reducing the amount of your reported reserve in each year.
