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File an amended 2017 tax return. The IRS requires you to report a change of ownership in the year it happened. If the home was foreclosed in 2017, it should have been reported on the 2017 return.
If it was reported on the 2017 return, and the home is still showing in the IRS database, then contact the IRS.
Call 1-800-829-1040. Be aware. The phone lines are backed up. The IRS opens at 7 a.m. local time in every time zone. The earlier you call, the better your chance of speaking with someone.
OK, what have you been doing since? Making extra $500 payments? You may be able to get those back.
When the home stopped being his main home in 2017, he was required to file form 5405, reporting the sale or foreclosure. Depending on the financial circumstances, he owed full repayment of the remaining balance at that time or possibly less. Then, he was not required to make additional payments for 2018-2021.
Start by filing an amended return for 2017 to include form 5405 and report the foreclosure. If he was required to make repayment, he should claim any payments made from 2017-2021 as part of his total repayments, which will reduce any amount he owed.
If the balance was forgiven on form 5405 (based on the circumstances of the foreclosure) then he would be entitled to a refund of his $500 payment for 2017, but it won't be paid because it's too late. However, he can then file amended returns for 2018, 2019, and 2020, to claim a refund of the $500 paid in each of those years.
Turbotax 2017 is no longer available. He will need to prepare the amended return by hand or use a professional tax preparer who still has the 2017 software.
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