2008 Homebuyer Credit Repayment - Why is form 5405 being deleted when I still owe credit repayment?

[mferrer-josephan]

 I correctly select "Yes, but the home we received the credit for stopped being our main home on or before December 31, 2017". Next, it's confirming the deletion form 5405. 5405 actually still needs to be included and I owe the remaining balance of the Homebuyers Credit. It's deleting the form and not prompting the remaining repayment amount. This is a pretty huge error and resulted in my efile being rejected. Upon choosing "Fix My Return", I'm not finding any prompts, tools or resolutions available to correct this in the system and re-efile. 

[IreneS]

Did you live in the home in 2018 at all?

[mferrer-josephan]

no, we sold it in 2017

[IreneS · Accepted solution]

You indicated to TurboTax that the home was not your main home during 2019 by selecting "Yes, but the home we received the credit for stopped being our main home on or before December 31, 2018."  That's why Form 5405 was not being generated in your 2019 return--because you did have the house in 2018.

You should have reported this on your 2018 return and paid the balance then.

As a workaround, you could indicate that it was your home on January 1, 2019 and also ceased being your home on the same date [1/1/2019].

To do this, please follow these steps:

1. Click on Federal > Deductions & Credits 
2. In the Your Home section, click on the Start/Revisit box next to Homebuyer Credit Repayment.
3. On the next screen, Tell Us About Your Homebuyer Credit, mark the appropriate radio button.  Selected the option that the home was still your main home on January 1, 2019, enter the date of purchase in the box that appears and click Continue.
4. On the screen, At the end of 2019, did you still live in the home you bought in 2008? mark the No radio button and enter 1/1/2019 as the date you stopped using the home.  Select the appropriate option below that.
5. On the screen, Tell Us More About Your Home Situation, mark the button I sold the home and click Continue.
6. Follow the rest of the screens, entering the requested information.
   

[Edited | 3/9/2020 1:40pm PDT]

[mferrer-josephan]

Irene, thank you so much! That worked! You're amazing! xo

[jMazz02]

I'm also having trouble with this section. The home was not my home in 2018, it stopped being my home in 2012. I've been paying this back every year since i got the lone. but this is the first time i have used turbo tax, so i'm not sure how to do this.

[CassLO]

If you answer Yes to the second question (it stopped being your main home). Then select Continue and answer Yes on the next screen, this is what would be causing the form to delete. Please see the TurboTax FAQ below for additional information and instructions:

How do I add or remove Form 5405 for the first-time homebuyer credit?

[TSpins]

Hello, I also have a related question. I took the homebuyer credit in 2008 but transferred the home to my spouse in 2014. I continued to pay the credit back for years, but am no longer going to, since according to everything I've read, I shouldn't have to. 

I have selected "Yes, but the home I received the credit for stopped being my main home on or before December 31, 2018" on the homebuyer credit screen, but when I hit "continue" it takes me back to the "deductions and credits" main page. It does not give me additional questions, as eluded to in responses in this thread. 

In addition to that, when I return or "revisit" this section, my answer has defaulted/changed to "No, I never got this credit," which is not truthful. I just spent 45 minutes on the phone with customer service and their only advice was to pay $50 to talk to a live CPA. That will not resolve this issue. Any help is greatly appreciated!

[DaveF1006]

Generally when you sell your home and you taken a first time Homebuyer's credit in 2008, You need to pay the remaining balance on your first time Homebuyer's credit in the year you sold your house. For an example, if you sold your home in 2014, you would had to pay the remaining balance of $5000 in 2014.  It doesn't matter if you transferred it to your spouse or sold the house. You need to reapy the balance of the credit.

My suggestion when you fill out your return this year, indicate you sold your house in 2019. Turbo Tax will calculate the remaining balance and you will need to pay the remaining balance of your first time Homebuyer's repayment.  I suspect when your taxes were prepared in 2014, you did not properly report that you transferred your house in 2014. As a result, from 2014 until now, you may have been repaying that $500 as if you still owned the house.  

Please review this Turbo Tax link that verifies the information that I have just given you is correct.

[TSpins]

Thanks, Dave. But everything I've read, including information on TurboTax's site, says that if the home was transferred, then repayment of the credit becomes their responsibility. Here is the exact line from TurboTax: You transferred the home to your ex-spouse as part of your divorce settlement (your ex is now responsible for repaying the credit).

That said, there are only three answers available for the question related to this homebuyer credit: 1) I took the credit and still live there, 2) I took the credit but no longer live there, and 3) I did not take the credit. The only answer that truthfully applies to me is #2 but for some reason the site keeps defaulting my answer to #3, which is not at all true. I'm trying to figure out why my answer is being changed and why I'm not receiving any additional qualifying questions, as mentioned in replies above, when I select #2.

[DaveF1006]

It is because you did not indicate in 2014 on your tax return that you no longer owned the house. IRS assumes you still own it.  You need to indicate on this year's return that you no longer own the house OR amend 2014 return to indicate you transferred/sold the house then. Please review this Turbo Tax link, for more information about repayment.

[TSpins]

Thank you. Where is the option to report that I transferred the house? I would think it would be a sub-question under the radio button "yes, but I no longer live there," but as I mentioned, I'm not getting any sub-questions when I select that answer. 

[ThomasM125]

You wouldn't report anything about the house disposition in the current year, since you disposed of it in a prior year. You need to amend the return for the last year the home was your primary home and pay in the final tax due on that amended return.

[TSpins]

But everything I've read, including information on TurboTax's site, says that if the home was transferred, then repayment of the credit becomes their responsibility. Here is the exact line from TurboTax: You transferred the home to your ex-spouse as part of your divorce settlement (your ex is now responsible for repaying the credit).

[sudeeptomar]

I have a similar issue but different situation. The home stopped being my primary home back in 2009 itself but i have not sold it. This happened due to military orders so i don't have to pay back the homebuyer credit. so by selecting second option it still should generate form 5405 and the option of moved due to government order should be checked.