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Rlk0403
Returning Member

REPAYING FIRST TIME HOME BUYERS CREDIT FROM 2008

I AM TRYING TO NOTE THE @$250 I OWE FOR MY REPAYMENT.  WE HAVE NOT LIVED IN THE HOME PURCHASED IN 2008 SINCE 2013 BUT I CLICK THE HOME BUYER CREDIT REPAYMENT UNDER DEDUCTIONS/CREDITS.  THE 3 OPTIONS : 1) STILL LIVE THERE IN 2018- WE DID NOT

2)YES RECEIVED CREDIT BUT STOPPED BEING OR HOME ON OR BEFORE 2017**** THIS IS WHAT I NEED TO CLICK BUT WHEN I DO IT TELLS ME REMOVING FORM 5405

SO HOW AM I SUPPOSE TO PAY MY $250 OWED? 

THNXS FOR THE HELP

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2 Replies
HollyP
Employee Tax Expert

REPAYING FIRST TIME HOME BUYERS CREDIT FROM 2008

You likely should have reported and paid the remaining $250 balance in the year that it stopped being your home. It cannot be reported in any other tax year, therefore you must go back and amend the return from the year in which you stopped living in the home if it was within the last 3 years. Click here to learn more about the repayment of the credit. Then, click here for amendment instructions.  

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REPAYING FIRST TIME HOME BUYERS CREDIT FROM 2008

When you sold or moved out of the home in 2013, you were supposed to file form 5405 with your 2013 tax return.  You owed immediate full repayment of the credit, or partial repayment, or no repayment, depending on why you moved out and your financial circumstance in 2013.  From then on, you owed no further repayments, regardless of whether the credit was paid in full or forgiven.  

 

(There are a couple of exceptions.  If the home was condemned in 2013 due to fire, flood etc. and you moved into a new home, you can continue to make payments. In that case, say that you still live in the home.  If you transferred your home to spouse in a divorce, then your spouse becomes responsible for paying your share, not you.)

 

 

You need to start by filing an amended return for 2013 to compute the amount of repayment owed.  At this point, the penalties and interest on the late payment will likely add another 75% to the amount that was owed.  You will need to prepare the amended return yourself or see a tax preparer, since Turbotax can't be used that far back.  I would not send in any penalty or interest now, wait until the IRS issues a bill.  You can then ask for relief from the penalty if this is the first time you owed a penalty. (The interest can't be waived, however.)

 

Then for 2014-2017, you owed no repayment amounts.  You can file an amended return for 2016 and 2017 to get a refund of the payment you made, but it is too late to amend for 2014 or 2015 to get a refund.

 

For 2018 you owe no repayment but the IRS thinks you do since you never filed the 5405 correctly in 2013.  So leave the payment off your tax return but print your return and file by mail.  There is a chance the IRS will automatically hold back the payment; if they do this, you can amend to claim a refund once you have filed the amended 2013 tax return.

 

You may want the help of an experience tax preparer.  A CPA or Enrolled Agent can also help negotiate a lower repayment with the IRS.   

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