We received the First Time Homeowner Loan in 2008. We have been making yearly payments. Now the IRS thinks we have sold our home and are demanding we pay the loan with the sale proceeds. We did not sell the home, or own any other home, and it is our primary residence. They want For 5045 to be sent in, but since we didn't sell it, we can't fill it out. What do we do?
Form 5405, Repayment of the First-Time Homebuyer Credit is not just for a change of ownership but also to report the repayment of the homebuyer credit every year.
I’m guessing that you did not include the $500 payment on your return so IRS assumed you sold your home.
Check your Form 1040, Schedule 2, line 10 to see whether you have $500 on that line.
To add Form 5405:
- Start the amend process: How do I amend my 2021 return?
- Type homebuyer credit in Search in the top right
- Select Jump to homebuyer credit and complete the info
- Send your amended return to IRS