Solved: Tax form 5405 First time home buyers
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zzjransomzz1975
New Member

Tax form 5405 First time home buyers

First time homebuyers credit repayment, I am not able to complete. I did not sell in 2019, I did not use home as main home in 2019. It does not let me input information
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Opus 17
Level 15

Tax form 5405 First time home buyers

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 2018.  You may owe additional tax if you had a gain on the home.  For 2019, you don't owe repayment but the IRS thinks you do so you will have to file by mail.

 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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4 Replies
Opus 17
Level 15

Tax form 5405 First time home buyers

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 2018.  You may owe additional tax if you had a gain on the home.  For 2019, you don't owe repayment but the IRS thinks you do so you will have to file by mail.

 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

View solution in original post

vgangwer1
New Member

Tax form 5405 First time home buyers

Your issue is my issue also.  I have input correct information into the top of form and answered yes to box, but it wants to delete form immediately and not let anyone input information in Part  I, II, or II

 

It needs an update to correct this problem

Critter-3
Level 15

Tax form 5405 First time home buyers

@vgangwer1 

 

The form 5405 is indeed working correctly ... so are you still using the home as your personal residence or did you sell it in 2020?  

Opus 17
Level 15

Tax form 5405 First time home buyers

@vgangwer1 

form 5405 can only be included on your tax return if you sold or moved out of your home in 2020. If you are still living in the home, you don’t need the form, you simply include the payment on your tax return on schedule 2, line 7B. TurboTax will do this for you if you answer the interview questions correctly.

 

If you moved out of your home prior to 2020, you can’t include form 5405 on this year‘s tax return. You must report the move and include form 5405 on the tax return for the year you sold or moved out.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
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