Hi, we sold our home in 2014 at a loss and are still repaying he credit. I filled out the home sale info on 2014 year return but if I try and not pay back credit irs rejects return. How do I remedy this?
You have to report the loss on your 2014 tax return using form 5405. Just reporting the loss in the capital gains section doesn't do it. You have to separately and additionally go to the section for first time home buyer credit on the deductions and credits page, answer "yes I got the credit in 2008" and "yes, I sold or moved out in 2014". You will then be asked questions to calculate the amount of repayment owed or not. If you sold at a loss, that would cancel your future repayments owed including 2015 and 2016.
Either you didn't report the sale correctly on your 2014 tax return or the IRS didn't process it correctly. First print a copy of your 2014 tax return and see if you have a form 5405 reporting the sale and showing zero repayment on line 8 of the form. If you do have the form, contact the office of taxpayer advocate to ask them to fix your case so that you no longer show up in the system as owing. https://www.irs.gov/advocate
If you don't have form 5405 then you need to amend your 2014 tax return (you can't fix it on your current 2016 return). The amending instructions are below. Amended returns must be printed and mailed in and generally take 4-6 months to process. You should expect a refund of the $500 payment you made on your 2014 return if you did sell at a loss but included the repayment. Once you know your amended return is processed you can file amended returns for 2015 to get that payment back.
For 2016, you can either include the payment now and then amend later, or you can try to print your return and mail it in without the payment. (Although the IRS may automatically remove the payment anyway, in which case you are back to amending.)
You have to report the loss on your 2014 tax return using form 5405. Just reporting the loss in the capital gains section doesn't do it. You have to separately and additionally go to the section for first time home buyer credit on the deductions and credits page, answer "yes I got the credit in 2008" and "yes, I sold or moved out in 2014". You will then be asked questions to calculate the amount of repayment owed or not. If you sold at a loss, that would cancel your future repayments owed including 2015 and 2016.
Either you didn't report the sale correctly on your 2014 tax return or the IRS didn't process it correctly. First print a copy of your 2014 tax return and see if you have a form 5405 reporting the sale and showing zero repayment on line 8 of the form. If you do have the form, contact the office of taxpayer advocate to ask them to fix your case so that you no longer show up in the system as owing. https://www.irs.gov/advocate
If you don't have form 5405 then you need to amend your 2014 tax return (you can't fix it on your current 2016 return). The amending instructions are below. Amended returns must be printed and mailed in and generally take 4-6 months to process. You should expect a refund of the $500 payment you made on your 2014 return if you did sell at a loss but included the repayment. Once you know your amended return is processed you can file amended returns for 2015 to get that payment back.
For 2016, you can either include the payment now and then amend later, or you can try to print your return and mail it in without the payment. (Although the IRS may automatically remove the payment anyway, in which case you are back to amending.)
You can check your First Time Homebuyer Credit Account on the IRS web site at the following link. It might also allow you to make corrections. At this link there is also a special IRS phone number for questions about the First Time Homebuyer Credit.
<a rel="nofollow" target="_blank" href="https://www.irs.gov/credits-deductions/individuals/first-time-homebuyer-credit-account-look-up">https://www.irs.gov/credits-deductions/individuals/first-time-homebuyer-credit-account-look-up</a>