ADU being taxed as a commercial sale?

[Ed Dunbar]

Hello!

We sold our home after living there for over 5 years. The home had an ADU which we used as a home office. We sold in 2022, and our accountant is saying that we somehow owe taxes on a portion of the proceeds as the tax forms included a 1099 SA form (I have no idea what that means) and that 31% of the proceeds would be taxable. This would be an astronomical tax bill that we have absolutely no way of paying, so I am hoping someone might have a tip or 2 on how to navigate this? We rented it out when we first moved in to a tennant and eventually had him move out and used it as a home office.

Hoping someone has a magical fix for this.