Instructions For Form 5405 - (Rev. March 2011) (Page 2 of 6) in pdf

Additional time to purchase a home for members of

your stepchildren), and any relationships described in 9b

the uniformed services or Foreign Service and

or 9c above that your spouse has.

employees of the intelligence community. Members

of the uniformed services or Foreign Service and

Amount of the Credit

employees of the intelligence community who are on

qualified official extended duty outside the United States

First-time homebuyer. Generally, the credit is the

may have additional time to purchase a home and qualify

smaller of:

•

for the credit. See the instructions for Line D on page 3 to

$8,000 ($4,000 if married filing separately), or

•

find out if you qualify.

10% of the purchase price of the home.

Long-time resident of the same main home.

Note. If you were unmarried when you purchased your

Generally, the credit is the smaller of:

home and qualified for the credit, then married someone

•

$6,500 ($3,250 if married filing separately), or

who does not qualify for the credit, and are claiming the

•

10% of the purchase price of the home.

credit for the year in which you are married, you can do

Note. See the instructions for line 1 on page 4 for the

one of the following.

•

definition of purchase price.

You can claim up to an $8,000 credit ($6,500 credit if a

long-time resident) on a joint return.

Phase-out of the credit. You are allowed the full

•

You can claim up to a $4,000 credit ($3,250 credit if a

amount of the credit if your modified adjusted gross

long-time resident) on a married filing separate return

income (MAGI) is $125,000 or less ($225,000 or less if

and your spouse is not allowed to claim any part of the

married filing jointly). The phase-out of the credit begins

credit on his or her return.

when your MAGI exceeds $125,000 ($225,000 if married

filing jointly). The credit is eliminated completely when

Main home. Your main home is the one you live in most

your MAGI reaches $145,000 ($245,000 if married filing

of the time. It can be a house, houseboat, mobile home,

jointly).

cooperative apartment, or condominium.

For a definition of MAGI, see the instructions for line 5

Who Cannot Claim the Credit

on page 4.

You cannot claim the credit if any of the following apply.

What To Attach to Your Return

1. The purchase price of the home (defined in the

If you claim the credit on your 2009 (or later) original or

instructions for line 1 on page 4) is more than $800,000.

amended tax return, you must attach the following

2. Your modified adjusted gross income is $145,000

documentation regarding your main home (as

or more ($245,000 or more if married filing jointly).

applicable). If you do not attach the documentation,

See the instructions for line 5 on page 4.

the credit may not be allowed.

3. You cannot claim the credit for any year for which

Attach a copy of your settlement statement showing all

you can be claimed as a dependent on another person’s

parties’ names and signatures, the property address, the

tax return.

contract sales price, and the date of purchase. In most

4. You (and your spouse if married) are under age 18

cases, your settlement statement is your properly

on the date of purchase.

executed Form HUD-1, Settlement Statement. In

5. You are a nonresident alien.

locations where the signatures of the buyer and seller are

6. Your home is located outside the United States.

not required, the IRS encourages the buyer to sign the

7. You sell the home, or it ceases to be your main

settlement statement before attaching it to the tax

home, before the end of the year in which you purchased

return—even if the settlement statement does not

it. This rule does not apply if you or your spouse are, or

include a signature line.

were, a member of the uniformed services or Foreign

If you are unable to obtain a settlement statement

Service or an employee of the intelligence community on

because you purchased a mobile home, attach a copy of

qualified official extended duty as defined in the

your executed retail sales contract showing all parties’

instructions for line 12 on page 4 and you sell the home,

names and signatures, the property address, the

or it ceases to be your main home, after 2008. You can

purchase price, and the date of purchase.

claim the credit on the return for the year of purchase or

choose to claim it on your return for the year before the

If you are claiming the credit for a newly constructed

year in which you purchased the home if you otherwise

home and you do not have an executed settlement

qualify for the credit.

statement, attach a copy of your certificate of occupancy

8. You acquired the home by gift or inheritance.

showing your name, the property address, and the date

9. You acquired your home from a related person.

of the certificate.

This includes:

Additional documentation. You should also attach the

a. Your spouse, ancestors (parents, grandparents,

following documentation, if applicable, to avoid delays in

etc.), or lineal descendants (children, grandchildren, etc.).

the processing of your return and the issuance of any

b. A corporation in which you directly or indirectly own

refund.

•

more than 50% in value of the outstanding stock of the

If you checked the “Yes” box on line C (or the box on

corporation.

line D and you purchased your home after April 30,

c. A partnership in which you directly or indirectly own

2011), attach a copy of the pages from a signed contract

more than 50% of the capital interest or profits interest.

to make a purchase showing all parties’ names and

For more information about related persons, see the

signatures, the property address, the purchase price, and

discussion under Nondeductible Loss in Chapter 2 of

the date of the contract.

•

Pub. 544, Sales and Other Dispositions of Assets. When

If you are claiming the credit as a long-time resident of

determining whether you acquired your main home from

the same main home, attach copies of one of the

a related person, family members in that discussion

following: Form 1098, Mortgage Interest Statement (or

include only the people mentioned in 9a above.

substitute statement), property tax records, or

10. You acquired your home from a person related to

homeowner’s insurance records. These records should

your spouse. This includes your spouse’s ancestors or

be for 5 consecutive years of the 8-year period ending on

lineal descendants (for example your parents-in-law or

the purchase date of the new main home.

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Instructions for Form 5405 (Rev. 3-2011)

Instructions For Form 5405 - (Rev. March 2011) Page 2

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