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first time homebuyer credit

when i was married we had received the credit and I  have been repaying the credit back however I have been divorced since July 2014 and I lost the home to my husband.  I still have been having to repay this credit back.  I have not lived in the home for many years.  He also sold the house sometime after my divorce.  When I click yes that I received the credit but the home is no longer my home it deletes the form but IRS keeps rejecting my refund.  Can someone please help?

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Accepted Solutions
PattiF
Expert Alumni

first time homebuyer credit

Here is an answer from Opus17 - Tax Champ

 

If you sold or otherwise moved out of the home where you got the credit in a previous year, you were supposed to report the disposal of the home on form 5405 in that year.  The only time you can transfer the repayment to a new home is if the prior home was condemned or destroyed by fire, flood, etc.  Then you have the option of transferring the 15 year payment schedule to a new home.  In all other circumstances, you must close out the credit in the year the home stops being your main home.  

 

If you sold with a gain or converted it to a rental, you owed immediate repayment of the remaining balance. If you sold at a loss, you owed no further repayments but it must be reported.  If you transferred your share of ownership to a spouse in a divorce, you file the form to transfer responsibility for your share of the credit. Either way, you file form 5405 in the year the home stops being your main home and you make no payments after.

 

You will need to file an amended return for the year you moved out of the home and report that on form 5405.  You can claim credit for payments you made through 2019.  You may owe additional tax if you had a gain on the home.  For 2020, you don't owe repayment but the IRS thinks you do so you will have to file by mail.

 

 

You will need to mail a paper return and include Form 5405.

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4 Replies
PattiF
Expert Alumni

first time homebuyer credit

Here is an answer from Opus17 - Tax Champ

 

If you sold or otherwise moved out of the home where you got the credit in a previous year, you were supposed to report the disposal of the home on form 5405 in that year.  The only time you can transfer the repayment to a new home is if the prior home was condemned or destroyed by fire, flood, etc.  Then you have the option of transferring the 15 year payment schedule to a new home.  In all other circumstances, you must close out the credit in the year the home stops being your main home.  

 

If you sold with a gain or converted it to a rental, you owed immediate repayment of the remaining balance. If you sold at a loss, you owed no further repayments but it must be reported.  If you transferred your share of ownership to a spouse in a divorce, you file the form to transfer responsibility for your share of the credit. Either way, you file form 5405 in the year the home stops being your main home and you make no payments after.

 

You will need to file an amended return for the year you moved out of the home and report that on form 5405.  You can claim credit for payments you made through 2019.  You may owe additional tax if you had a gain on the home.  For 2020, you don't owe repayment but the IRS thinks you do so you will have to file by mail.

 

 

You will need to mail a paper return and include Form 5405.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

first time homebuyer credit

please post the rejection message and code and maybe we can help. 

first time homebuyer credit

S2-F1040-147 - The e-file database indicates a First Time Homebuyer Installment Payment is due for the Primary SSN.  Include amount on schedule 2 (Form 1040).  FirstTimeHmByrRepaymentAmt and attach Form 5405 if required.

 

But again I have not been in the home Since my divorce in 2014.  My husband won the home in our divorce.

first time homebuyer credit

So I will need to file an amended tax return for 2014 before I can file my 2020 taxes, is that correct?

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