@MarilynG1 wrote:
@Littlebit196868 Per Champ @Opus17:
"If you sold the home in a year before 2020, the interview will not let you make a $500 payment and it will kick you out. This is because you were required to file form 5405 in the year that you sold the home to report the sale. In most cases, you will owe a full repayment of the remaining credit, unless you sold the home for a loss."
Since you sold the home in 2011 at a loss, you can skip entering Form 5405 in 2020. Save your Sale Records that show you sold the home at a loss.
It's too late to Amend your 2011 return to report the sale.
Click this link for more info on How to Remove Form 5405.
@MarilynG1 I believe a 2011 amended return is still required to report the sale, even though no refund would be paid, if one was calculated on the amended return. Also, the taxpayer can probably amend for 2017, 2018 and 2019 to get any excess payments back.
It might be possible to file the 2011 form 5405 as a stand-alone form, but I would want to talk to a professional about that first. If the taxpayer doesn't close out the credit properly, the IRS will continue to think they owe a payment until the credit has been repaid in full, which is not required in the case of selling at a loss.
