In that case it matters if the taxpayer had a gain or loss on the fire. I pulled the instructions on the 2012 version of form 5405. If the home was destroyed and there was a loss, then the credit is forgiven and no repayment is owed in 2012 or any future year. If the home was destroyed with a gain, then immediate repayment of the full credit balance is due, BUT the immediate repayment can be deferred if the homeowner buys a new home within two years.
So the question for
@chrisdrouin30 is, was there a gain or loss on the fire. Was the insurance reimbursement more or less than the following figure:
(original purchase price plus closing costs plus improvements you paid for minus the credit balance remaining in 2012).
If you had a gain on the fire, then
@TurboTaxIrene 's answer is correct and you keep repaying, and in turbotax you should just say you "still live in the same home". But if you lost money on the fire, then you did not owe repayment in 2012 or after, and you can file some paperwork to fix it and get some money back.
