Deductions & credits

I don't know what you mean by "the credit was paid off at that time" because you can only pay back the credit on your tax return.  You have to do this in its own section, separate from reporting the sale in the capital gains section.

 

What should happen is that you go to the First Time Homebuyer interview and answer that you sold the home in 2023.  The program should ask for the purchase price, selling price, amount of original credit, and amount of credit you have paid off so far.  If your gain on the sale (increase in the home's value) is more than the credit, then the remaining amount of the credit is added to your tax owed.

 

If this is not working correctly, post back here.  I checked briefly against a list of known errors and I did not see this listed, but that doesn't mean there might not be a program bug.