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How do I report the sale of my home (principal residence)?

by TurboTax•1• Updated 1 week ago

From 2016, details about the sale of your principal residence must be reported on your tax return. This information should be entered in the Income section of TurboTax.

Note: Since 2001, only 50% of capital gains have been taxed. This amount is called the inclusion rate. Under federal legislation proposed at the time of this update, the inclusion rate for tax years 2024 and beyond is as follows:

  • Individuals with capital gains in a year have an inclusion rate of:
    • 50% on the first $250,000 of capital gains
    • 66.67% on the amount of capital gains over $250,000 
  • Corporations have an inclusion rate of 66.67% for all capital gains in a year

2024 transitional timing rule:

  • The 50% inclusion rate is applied to all capital gains realized before June 25, 2024.
  • The 66.67% inclusion rate and the $250,000 individuals’ threshold apply only to 2024 gains realized after June 24, 2024.

At the time of this update, Parliament hasn't approved the proposed changes to capital gains laws yet. The CRA hasn't updated its forms to handle the changes yet. If and when the legislation is passed, TurboTax software will be updated as needed.

  1. From the Tax home screen, under Add to your return, enter principal and select Principal Residence.
  2. At the Sale of your Principal Residence screen, select the Sale of principal residence checkbox, then continue.
  3. Enter information related to the sale in the appropriate fields, then continue.
  4. At the Disposition to a spouse or partner screen, answer the question(s), then continue.
  5. At the Designation of a property as a Principal Residence screen, fill out the fields, then continue.
  6. At the Sale of Principal Residence Summary screen, if applicable, the principal residence exemption will be reflected in the amount for Federal capital gain/loss. If all of your capital gain is sheltered by the principal residence exemption, the Federal capital gain/loss will be zero. 
  1. From the Tax home screen, under Add to your return, enter principal and select Principal Residence.
  2. At the Sale of your Principal Residence step, select the Sale of principal residence checkbox for whoever owned or co-owned the property, then continue.
  3. At the Who disposed of the property? screen, select the owner or co-owners as applicable, then continue.
  4. At the Sale of your Principal Residence screen, enter the sales-related info in the appropriate fields, then continue.
  5. If you owned the property for different periods of time, at the Designation of a property as Principal Residence screen, enter the years of ownership details for each spouse.
  6. If only one of you owned the property, at the Disposition to a spouse or partner screen select the transferee, then continue.
  7. At the Designation of a property as a Principal Residence step, answer the questions, then continue.
  8. At the Sale of Principal Residence Summary screen, make sure the summary info is correct and continue.
  1. Select Find and enter principal.
  2. Select Principal Residence from the search results, then select Go.
  3. At the Sale of your Principal Residence screen, select the Sale of principal residence checkbox, then Continue.
  4. Enter information related to the sale in the appropriate fields, then select Continue.
  5. On the Disposition to a spouse or partner step, answer the question(s), then select Continue.
  6. On the Designation of a property as a Principal Residence step, fill out the fields, then select Continue.
  7. On the Sale of Principal Residence Summary step, select Continue.
  1. Select Find and enter principal.
  2. Select Principal Residence (not Principal Residences) from the search results, then select Go.
  3. At the Sale of your Principal Residence screen, select the Sale of principal residence checkbox for each spouse, then continue.
  4. At the Who disposed of this property screen, make a selection based on the ownership and continue.
  5. At the Sale of your Principal Residence screen, enter the info about the sale in the appropriate fields, then continue.
  6. At the Disposition to a spouse or partner screen, select the property transferee and continue.
  7. At the Designation of a property as a Principal Residence -Federal screen, fill out the fields, then select Continue.
  8. Repeat the last three screens, this time for the other spouse.
  9. At the Sale of Principal Residence Summary screen, you’ll see a summary with the amount of capital gain. If the sale was fully exempted by the principal residence exemption, any capital gain will be zero.
  1. Select Find and enter principal.
  2. Select Principal Residence (not Principal Residences) from the search results, then select Go.
  3. At the Sale of your Principal Residence screen, select the Sale of principal residence checkbox for whoever owned the property, then Continue.
  4. At the Sale of your Principal Residence screen, enter information about the sale in the correct fields, then continue.
  5. At the Disposition to a spouse or partner screen, select the transferee, then continue.
  6. At the Designation of a property as a Principal Residence - Federal screen, answer the questions, then continue.
  7. On the Sale of your Principal Residence Summary step, you’ll see a summary with the amount of capital gain. If the principal residence exemption fully exempted the sale, any capital gain would be zero.
  1. From the menu, select View, then Find Form.
  2. In the Keyword to search for field, enter principal residence.
  3. Select PRWS – Principal Residence designation worksheet from the results in the Forms box, then select OK.
  4. On the Principal Residence Designation Worksheet, enter information about the sale in the appropriate fields.

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