FTHB Credit Payback and reject code from IRS

[David1980]

Do you have "Original credit from Form 5405" entered? Also "Date home ceased to be main home if not sold".

[taxmom34]

well, I'm glad I was wrong, thank you. that's what I get for agreeing with IRS

[BP.]

I kinda agree with the IRS . . . your client doesn't live there anymore because of divorce, so client needs to pay back (at least half)

http://www.irs.gov/uac/First-Time-Ho...chased-in-2008

Q. What are the exceptions where I may not have to repay the full credit?

A. The exceptions where you may not have to repay the full credit are:
If you (transferor spouse) transfer your home as part of a divorce settlement, your former spouse (transferee spouse) who keeps the home is responsible for making the rest of the repayments and you are not responsible for making any remaining repayments.

Kerrie, I don't know how to make your particular software clear the reject, but I think your attempted treatment is right.

[taxmom34]

I'm not sure if I am right or wrong because I kinda agree with the IRS. when they got the credit they must have been married filing joint, your client doesn't live there anymore because of divorce, so client needs to pay back (at least half). I am thinking like a lay person, does this make sense or is it making sense that IRS is right.

[tpnl]

New client for me this year.

Divorced taxpayer tax return is rejected because the IRS thinks the FTHB Credit payback should be on the return. Ex got home in the divorce. Does anyone know what I have to fill out in DRAKE to get the IRS to accept an efiled return without the FTHB Credit Payback on the return?

I have filled out the Form 5405 Part I with box 3e checked and have entered the ex-spouse name but I don't see DRAKE producing any forms.

Thanks

Kerrie