I spoke to an agent on the phone helping me thru the 5405 home tax credit sheet. I'm unable to figure out a way to load that file into turbo tax so I can file taxes.

[Opus 17]

You only need that form this year if you stopped using the home where you got the credit in 2016 (sold, moved out, etc).  If you moved out in a prior year, you have to do something different.  Let us know if you need more info.

[chrisdrouin30]

yes the home burnt in 2012, but we still are set to pay the loan back in yearly installments. when I upload the 5405 form as the online turbo tax screen states it direts me to an IRS page but still says on the TT website I can complete the form and continue the process. what do I do?

[IreneS · Accepted solution]

Sorry to hear about the fire!

If the original house stopped being your principal residence due to an "involuntary conversion" [destroyed by fire] and you purchased a replacement residence within two years the general repayment rules apply to the new principal residence as if it were the converted home.

For this year's return (and going forward), on the screen Tell Us About Your Homebuyer Credit mark the first radio button - Yes, and the home we received the credit for was still our main home on January 1, 2016.

[Opus 17]

I've never heard the 2 year replacement rule.  Can you tell me where to find that?

[IreneS]

Sure - It's in the instructions for Form 5405, p. 3, Line 3f.  [<a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/i5405.pdf">https://www.irs.gov/pub/irs-pdf/i5405.pdf</a>]

Or if you prefer the "legalese" 🙂  it's cited in 26 U.S. Code Section 36, paragraph (f)(4)(B):

 "Paragraph (2) [acceleration of recapture] shall not apply in the case of a residence which is compulsorily or involuntarily converted (within the meaning of section 1033(a)) if the taxpayer acquires a new principal residence during the 2-year period beginning on the date of the disposition or cessation referred to in paragraph (2). Paragraph (2) shall apply to such new principal residence during the recapture period in the same manner as if such new principal residence were the converted residence."

[Opus 17]

In that case it matters if the taxpayer had a gain or loss on the fire.  I pulled the instructions on the 2012 version of form 5405.  If the home was destroyed and there was a loss, then the credit is forgiven and no repayment is owed in 2012 or any future year.  If the home was destroyed with a gain, then immediate repayment of the full credit balance is due, BUT the immediate repayment can be deferred if the homeowner buys a new home within two years.

So the question for @chrisdrouin30 is, was there a gain or loss on the fire.  Was the insurance reimbursement more or less than the following figure:

(original purchase price plus closing costs plus improvements you paid for minus the credit balance remaining in 2012).

If you had a gain on the fire, then @TurboTaxIrene 's answer is correct and you keep repaying, and in turbotax you should just say you "still live in the same home".  But if you lost money on the fire, then you did not owe repayment in 2012 or after, and you can file some paperwork to fix it and get some money back.

[IreneS]

You can make a payment toward your 2008 Homebuyer's Credit using TurboTax.  Please follow these steps:

1. Click on Federal Taxes > Deductions & Credits  [In TT Self-Employed:  Personal > Deductions & Credits > I'll choose what I work on].
2. In the Your Home section, click on the Start/Revisit box next to Homebuyer Credit Repayment.  [See Screenshot #1 below.]
3. On the next screen, Tell Us About Your Homebuyer Credit, click the appropriate Yes box, enter the Date of Purchase, and then click Continue.  [Screenshot #2]
4. Continue through the screens, entering the requested information.

[chrisdrouin30]

I have gotten o this point as you have shown in the screen shots. In my situation I have to click on the second line stating that we no longer live in our home or moved out prior to 2015 ( technically home burnt to the ground)....when I click on this option I get no other prompting and when I hit continue the black dot switches to "no I never got this credit"

[IreneS]

See additional answer below.  Treat your current residence as if it were the original residence.