ChristieB
New Member

Deductions & credits

It is because the sale of this home should have been reported on Form 5405 the year that it was sold. Please see the following regarding the First-Time Homebuyer Credit.  

You sold your main home or the home is no longer your main home

You must report the sale or other disposition of your main home on a completed Form 5405, First-Time Homebuyer Credit and Repayment of the Credit, and attach it to your tax return for the year of the sale or other disposition. The IRS matches information from a variety of sources when your home is sold, destroyed, foreclosed on, or is no longer your main home. If you received the FTHBC and the IRS has information that the home is no longer your main home, the IRS checks your tax records to find out if you reported the sale or other disposition on the Form 5405. You may or may not have to repay the credit, but you do need to report the change to the IRS on the Form 5405.

https://www.irs.gov/newsroom/first-time-homebuyer-credit