Step 2-Find the right formДetermine the correct IRS tax form. You always need to report your business earnings to the IRS and pay tax on them, but choosing the right form to report earnings on depends on how you operate your business. Many small business owners use a sole proprietorship which allows them to report all of their business income and expenses on a Schedule C attachment to their personal income tax return. If you run the business as an LLC and you are the sole owner, the IRS also allows you to use the Schedule C attachment. However, if you use a corporation or elect to treat your LLC as one, then you must always prepare a separate corporate tax return on Form 1120 (or Form 1120S if you are an S-Corp). When you use TurboTax Home & Business (sole proprietors and contractors) or TurboTax Business (corporations, LLCs and partnerships), you just need to answer simple questions about your business income and expenses, and weвЂ™ll fill in all the right forms for you. However, she cannot exclude the part of the gain equal to the depreciation she claimed for renting the house.TurboTax Tip: When you use a Schedule C with Form 1040, or file Form 1120 for a corporation, you usually need to file your return by the April 15 deadline. Five Year PeriodДЄmy can exclude gain up to $250,000. During the 5-year period ending on the date of the sale (FebruJanuary 31, 2003), Amy owned and lived in the house for more than 2 years as shown in the table below. Amy moved back into the house on April 1,В 2001, and lived there until she sold it on January 31, 2003. The house was rented from June 1, 1999, to March 31,В 2001. She moved in on that date and lived in it until May 31, 1999, when she moved out of the house and put it up for rent. Business Use or Rental of HomeДЇor more information about your gain or loss calculations from the sale of a home that you have used for business or to produce rental income, see Publication 523. You own a house, but you live in another house that you rent. The house in the city is your main home the beach house is not. You also own a beach house, which you use during the summer months. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time. You must pay tax on the gain from selling any other home. If you have more than one home, you can exclude gain only from the sale of your main home.

You have a gain and choose not to exclude it, or.

You have a gain and do not qualify to exclude all of it,.

Report the sale or exchange of your main home on Form 8949, Sale and Other Dispositions of Capital Assets, if: Worksheets are included in Publication 523, Selling Your Home, to help you figure the: You cannot deduct a loss from the sale of your main home. If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).

Lived in the home as your main home for at leastВ two years (the use test).

Owned the home for at leastВ two years (the ownership test).

This means that during the 5-year period ending on the date of the sale, you must have: To claim the exclusion, you must meet the ownership and use tests. Your main home is the one in which you live most of the time. You may qualify to exclude from your income all or part of any gain from the sale of your main home.

Turbotax 2017 home and business sale