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First Time Homebuyer Installment Payment

Technical topics regarding tax preparation.
#1
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7
Joined:
22-Feb-2019 1:56pm
Location:
Tacoma, WA
My clients tax return got rejected because "the e-file database indicates a First Time Homebuyer Installment Payment". I haven't talked to the client yet but looking at their returns last year that was prepared by someone else didn't have Form 5405. Unsure how to go about this? Any advice?

They bought the home in 2008, and still live in it.
 

#2
dave829  
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539
Joined:
9-Jan-2018 9:28pm
Location:
California
Although there are exceptions which don’t appear to apply based on the facts you stated, for homes purchased between 4/10/2008 and 12/31/2008, the credit had to be repaid over 15 years starting two years after the year of purchase. Sec. 36(f)(1). The repayment was eliminated for homes purchased after 12/31/2008 if the taxpayer lived in the residence for at least 36 months. Sec. 36(f)(4)(D).

It looks like you’ll have to dig out old tax returns because if your client bought the home in 2008, the 15-year repayment period is 2010 to 2024.
 

#3
Posts:
66
Joined:
21-Apr-2014 7:44am
Location:
Endwell NY
Form 5405 is not required if you are simply making the $500 payment. It is a direct entry on line 60b of Schedule 4 (for 2018) or the equivalent line for 2017.

There is a look up tool available here:

https://www.irs.gov/credits-deductions/individuals/first-time-homebuyer-credit-account-look-up
 

#4
dave829  
Posts:
539
Joined:
9-Jan-2018 9:28pm
Location:
California
Thank you, Trailman423. I wasn't aware of the IRS's look up tool.
 

#5
Posts:
1041
Joined:
22-Apr-2014 5:22pm
Location:
Upstate, NY
The lookup tool does not always work/ report properly. I suggest getting POA and calling.
 


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