We bought at 165000 and sold at 227500. We incurred costs to repair and renovate. How do we report the details to generate a true capital gains report?
If you are using the Easy Steps method in Turbo Tax Desktop software then create the entry screen under Investments profile, select Capital Gains or Losses and continue. Next choose Sold...real estate and continue. Move past the first screen for Shares and the next entry screen will be for Real Estate sales. Provide the required information including Proceeds (selling price), Adjusted Cost (purchase and repairs) followed by selling costs (Commissions and legal). This should give you the accurate Capital Gain with 50% being the Net Taxable Gain reported on Schedule 3 and Line 127 of your spouse's tax return.