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Homebuyer credit but house was sold

I got home credit in 2008 and sold the house in 2015. I didnt repay the loan in my 2015 return. How do I pay the balance in 2016's return?
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New Member

Homebuyer credit but house was sold

You cannot file a Form 5405 for a home that stopped being your main home through sale, foreclosure, transition to a rental etc., prior to January 1, 2016 on your 2016 tax return.  If the home ceased being your main home in a prior year, you will need to file an amended return (Form 1040X) for the year of the event, reporting the sale of the home, and file a Form 5405 with the amendment reflecting the sale of the house and recapture any credit repayment you may owe. Additionally, if the IRS is expecting a credit repayment for a home that you have already disposed of, your 2016 e-file return will most likely be rejected and you will need to file a paper-return (see link to directions below). Once the amendment is processed reporting the disposition of the house you should no longer see IRS e-file rejects due to this. 

How to paper file a return:

TurboTax FAQ: How do I print and mail my return in TurboTax Online?

How to amend a prior year return:

 TurboTax FAQ: How to Amend (Change or Correct) a Return You Already Filed

You will need to gather different information depending on how you disposed of your home.

For a sale you will need to know:

1.      the amount of the Homebuyer Credit received

2.      the total amount of the credit you have repaid so far

3.      the sale amount of your home

4.      the selling expenses of your home

5.      and the adjusted cost basis of your home

For the sale of your home information start with your settlement statement.  A settlement statement usually comes from the closing of your real estate transaction. It may be a form entitled HUD-1, Settlement Statement or some other settlement statement. The statement shows all parties' names, the property address, sales price and the date of purchase.

For selling expenses start with the expense incurred in selling the home that appear on your settlement statement.  Add any other additional fix-up expenses you incurred in preparation for sale to the sale expenses.

The adjusted cost basis  of property is usually the original cost of the property adjusted for various items after you acquired it.

Adjusted basis includes:

  • including sales tax, purchase expenses, commissions, etc.
  •  permanent home improvements
  • nondeductible assessments for improvements (sidewalks, utilities, etc.)
  • depreciation claimed or allowable (if you had an office in your home or rented the home)
  • casualty and theft losses deducted

If part of the home loan was forgiven by the lender after 2006 and before 2017 and you chose to exclude this income from gross income (you filed Form 982), you must reduce your adjusted cost basis by the amount forgiven.

For example, you purchased your main home for $500,000. The lender restructured or refinanced your loan and forgave $200,000 of the loan. The adjusted cost basis is now $300,000 if you retained ownership of your home after the restructuring/refinancing.

Cost Basis of Inherited Property
If you inherited a home, the cost basis will depend on when you inherited it and the choices made by the executor of the estate. Special rules for property inherited and sold during 2010 may affect the cost basis.

If you inherited and sold a home in 2010, read the for Sale of Home and Publication 4895 and talk to the estate executor about decisions he or she made regarding the investment.

For more details, including a more complete list of additions and deductions to your basis,

 IRS Publication 523, Selling Your Home.

Homebuyer credit but house was sold

I sold my home in 2013 and in 2014 I reported to the IRS the disposition of my home. Since I made a profit when I sold my home I am still required to make payments every year until the total credit is paid off. TurboTax does not allow me to record my payment and my return keeps getting rejected. I can not e-file which is very inconvenient.
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