Form 5405 missing from e-file submission.

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I received a letter from the IRS stating that I needed to send in for 5405. I do not see that form included in my downloaded return and I am unsure of where to get it now.

Opus 17

Level 15

Form 5405 is used to report the sale or disposal of a home if you purchased the home in 2008 and received the first time home buyers tax credit that must be repaid. You are supposed to file this form in the year you stop using that home as your main home (because you sold, moved out, converted to rental, transferred to a spouse in a divorce, etc.). Depending on the circumstances, you will owe full, partial or no repayment of the credit at that time. Then you owe no repayments in the following years.

This form is only created if you tell Turbotax that you received the credit in 2008 and that you sold or moved out of the home in 2020 (for a 2020 tax return).

If you are still living in the home, you may need to make a repayment if you forgot, but that does not require including the form.

If you moved out prior to 2020, you need to fill out a form 5405 for that year, report the sale, and calculate and repay your credit. It sounds like you can probably download just the form, fill it out, and mail it to the IRS with a check (if you owe money) to the office that sent the notice, rather than sending an entire amended tax return.

smandel1980Author

Level 2

That is where I am confused. I still live in the home as my primary/only residence and turbotax estimated my repayment amount. However form 5405 is not included in the e-file submission that I downloaded and the IRS says they need it. If it isn't required since I still live in the home, how to I resolve this?

Opus 17

Level 15

@smandel1980 wrote:

That is where I am confused. I still live in the home as my primary/only residence and turbotax estimated my repayment amount. However form 5405 is not included in the e-file submission that I downloaded and the IRS says they need it. If it isn't required since I still live in the home, how to I resolve this?

I don't know what your letter exactly says. If you still live in the home where you got the credit in 2008, your repayment of the credit should be included on schedule 2, line 7b. Is your payment there?

Maybe the IRS got the idea you moved out? Did you use a different address this year, send them a change of address form, or something like that? Did you get divorced, maybe your spouse submitted a 5405 so the IRS thinks you need to submit one too, if you disposed of the home.

Does the letter say you must have form 5405, or does it say you must have form 5405 or make a payment on schedule 2?

If you did not make a payment, you need to do that now instead of including the form. You would prepare an amended return, but send the amended return and the check to the office that sent the letter, don't e-file the amended return. If you did make a payment and are still living in the home, I would send the IRS office a letter explaining that you still live in the home, and that form 5405 is not required, and include a copy of schedule 2 showing you made your payment on time.