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patdailey
New Member

Turbotax error for form 5405

The form 5405 is different in 2017. It specifically states that:

Use Form 5405 to do the following.
Notify the IRS that the home you purchased in 2008 and
for which you claimed the credit was disposed of or ceased
to be your main home in 2017. Complete Part I and, if
applicable, Parts II and III.
Figure the amount of the credit you must repay with your
2017 tax return. Complete Part II and, if applicable, Part III.

Pub 523

My son bought is home in 2008 and sold it in 2013. He is required to pay back the credit $500 per year. Form 5405 is not required because it is now specifically for homes bought in 2008 but sold in 2017. Instructions for Form 1040require an entry in line 60b for the repayment.

 

TurboTax step by step in deductions and credits there is a question "Did you get the homebuyer credit in 2008?" The correct answer for my son was "Yes, but the home I received the credit for stopped being my main home on or before December 31, 2016". When continuing, TurboTax said it is deleting form 5405.

 

I had to override the entry for line 60b and was informed that the form was incomplete and should not override the entry. The source for line 60b is form 5405, which is not required by the IRS. 

 

Consequently, TurboTax would not let my son perform an e-file and we had to send in a paper return. 

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2 Replies

Turbotax error for form 5405

Can you clarify why he is still paying back a credit on a home he sold in 2013.  The payback should have occurred when the house sold, typically.

ssherif
New Member

Turbotax error for form 5405

The issue I had is Turbotax would not generate 5405 for a sold home at a loss and efile kept getting rejected by the IRS.  It took 4 tries to refile and seems to be accepted now without 5405 - suspect I'll get audited now.

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