First time homebuyer tax credit

[CampbellCrews]

I bought my first home in 2008, and took the 1st time buyer credit. I sold that home in 2015. My return was rejected due to this credit. Turbo tax will not save my selection under the “I do not own the home any longer” 

[Opus 17]

You were required to report the sale of the home on your 2015 tax return using form 5405. At that time, you would have owed full repayment of the rest of the credit, or perhaps only a partial payment or no payment depending on the circumstances.  Then, in every year since, you have not owed the annual payment.  TurboTax will not let you make a payment in 2019 for a home that you moved out of in 2015. However, the IRS will not accept your e-filed tax return without a payment, because you did not tell them that you moved out of the home in 2015.

You need to file an amended tax return for 2015 that reports the sale of the home on form 5405, and includes full repayment of whatever remaining amount you owe.  Then, you could file an amended return for the 2017 and 2018 tax returns to claim a refund of the $500 you paid that you did not owe. (It is too late to file an amended return for 2016.)  For 2019, you will have to print your return and mail it in.

You can amend a 2017 and 2018 tax return using TurboTax. TurboTax does not support 2015 any longer, so you would need to prepare that amended return by hand using the 2015 forms and instructions that you can download from the IRS website, or you would need to see a tax professional.

[CampbellCrews]

The individual who has been filing my taxes never reported my house sale??? I indeed provided this information. I am confused and concerned!

[Opus 17]

Did they know you had the FTHB credit in 2008?

Ordinarily, the sale of your home is reported as a capital gain on schedule D. However, many homeowners owe no tax and make no report, if they are selling their personal home and their profit is less than $250,000 for a single person or $500,000 for a married couple.  Even if the sale is reported on schedule D, this does not take care of the filing requirement for the first time homebuyer credit on the form 5405.  Someone who received the credit in 2008 which was a repayable loan, must report the sale of the home on form 5405 whether or not they also report it on schedule D.

If you used a paid tax preparer for your 2015 tax return, you should go back to them and have them fix this for you.

[CampbellCrews]

Yes, they were aware, I have always used the same person. The profit was just enough to put down on a larger home for our growing family and was far below 250k.

I pulled my previous returns and it looks like the Tax Preparer has just continued to add the 500 repayment every year since we sold the property. This is making me very nervous. 

[Critter]

Ok ... so if you used a paid tax pro in the prior years and they goofed then return to them and let them make the corrections for free ... If  I were them I would amend the 2015 and reference the payments made by mistake on the 2016 thru 2018 returns.  

[Opus 17]

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@CampbellCrews wrote:

Yes, they were aware, I have always used the same person. The profit was just enough to put down on a larger home for our growing family and was far below 250k.

I pulled my previous returns and it looks like the Tax Preparer has just continued to add the 500 repayment every year since we sold the property. This is making me very nervous. 

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Your preparer is simply wrong, and they should fix it.

Now, for the amended 2015 when you will include form 5405, the form asks how much have you repaid so far.  @Critter is suggesting that you include the 2015-2018 repayments, as a way to get credit for them without having to amend 2016-2018 returns.  That may work, the worst the can happen is the IRS disagrees and they send you a letter and you file the amended returns.  

If you aren't confident in your preparer, you may need to change preparers, that's up to you.  

[CampbellCrews]

I don’t think that I will go back to this preparer. I am more comfortable doing it on my own with the help of TurboTax. I want to be sure this won’t happen again! 
I have tried so many times to get my balance from the IRS website but I only get an error message that they cannot process my request and I cannot get anyone on the phone. 
thank you SO much for the help!!!