Instructions For Form 5405 - (Rev. March 2011) Page 3
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6Repaying the Credit (for Purchases
this page) do not have to repay the credit if, after 2008,
they sell the home or the home ceases to be their main
After 2008)
home because they received Government orders to
If you purchase the home after 2008, and you own it and
serve on qualified official extended duty (see the
instructions for line 12 on page 4).
use it as your main home for at least 36 months
•
If you die, repayment of the credit is not required. If
beginning on the purchase date, you do not have to
you claimed the credit on a joint return and then you die,
repay any of the credit or file Form 5405 again.
your surviving spouse would be required to repay his or
For 2008 purchases, see Part IV, Repayment of
her half of the credit if, during the 36-month period
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Credit Claimed for 2008 or 2009, on page 6.
beginning on the purchase date, he or she disposes of
CAUTION
the home or it ceases to be his or her main home and
You generally must repay the credit if after the year for
none of the other exceptions apply.
which you claim the credit, you dispose of the home or it
ceases to be your main home during the 36-month period
Specific Instructions
beginning on the purchase date. This includes situations
where you sell the home (including through foreclosure),
you convert the entire home to business or rental use, or
Part I. General Information
the home is destroyed, condemned, or disposed of under
threat of condemnation.
Line B. Enter the date you purchased the home (or the
date you first occupied it if you constructed your main
When you convert your entire home to business
home).
or rental use, you no longer use any part of it as
TIP
your main home. The home is used for business if
Line C. See What To Attach to Your Return on page 2.
you use it for an activity that you carry on to make a
Line D. You have additional time to purchase a home if
profit. The facts and circumstances of each case
you (or your spouse if married):
determine whether or not an activity is a business.
1. Were on qualified official extended duty (defined on
You repay the credit by including it as additional tax on
page 4) outside the United States for at least 90 days
the return for the year you dispose of the home or it
during the period beginning after December 31, 2008,
ceases to be your main home. However, if the home is
and ending before May 1, 2010, and
destroyed, condemned, or disposed of under threat of
2. Were a member of the uniformed services or
condemnation, and you do not acquire a new home
Foreign Service or an employee of the intelligence
within 2 years of the event, you must repay the entire
community (defined below) during the time period in (1)
repayment amount with the return for the year in which
above.
the 2-year period ends.
If you meet both (1) and (2) above, you do not have to
If you and your spouse claim the credit on a joint
purchase your home during the time periods listed on
return, each spouse is treated as having been allowed
page 1 in item 1, under First-time homebuyer, and in item
half of the credit for purposes of repaying the credit.
2, under Long-time resident of the same main home.
Exceptions. The following are exceptions to the
Instead, you can qualify for this credit if you purchase
repayment rule.
your main home:
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If you sell the home to someone who is not related to
1. Before May 1, 2011, or
you, the repayment in the year of sale is limited to the
2. After April 30, 2011, and before July 1, 2011, and
amount of gain on the sale as determined on the Form
you enter into a binding contract before May 1, 2011, to
5405 Gain or (Loss) Worksheet on page 5. The amount
purchase the property before July 1, 2011.
of the credit in excess of the gain does not have to be
repaid. (See item 9 under Who Cannot Claim the Credit
See What To Attach to Your Return on page 2.
on page 2 for the definition of a related person.)
Uniformed services. The uniformed services are:
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If the home is destroyed or you sell the home through
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The Armed Forces (the Army, Navy, Air Force, Marine
condemnation or under threat of condemnation, you do
Corps, and Coast Guard),
not have to repay the credit if you purchase a new main
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The commissioned corps of the National Oceanic and
home within 2 years of the event and you own and use it
Atmospheric Administration, and
as your main home during the remainder of the 36-month
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The commissioned corps of the Public Health Service.
period.
Foreign Service member. For purposes of the
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If the home is destroyed or you sell the home through
credit, you are a member of the Foreign Service if you
condemnation or under threat of condemnation to
are any of the following.
someone who is not related to you and you do not
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A Chief of mission.
acquire a new home within the 2-year period, the
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An Ambassador at large.
repayment with your return for the year in which the
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A member of the Senior Foreign Service.
2-year period ends is limited to the gain on the
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A Foreign Service officer.
disposition as determined on the Form 5405 Gain or
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Part of the Foreign Service personnel.
(Loss) Worksheet on page 5. The amount of the credit in
Employee of the intelligence community. For
excess of the gain does not have to be repaid (See item
9 under Who Cannot Claim the Credit on page 2 for the
purposes of the credit, you are an employee of the
definition of a related person.)
intelligence community if you are an employee of any of
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If the home is transferred to a spouse (or ex-spouse as
the following.
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part of a divorce settlement), the spouse who receives
The Office of the Director of National Intelligence.
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the home is responsible for repaying the credit if, during
The Central Intelligence Agency.
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the 36-month period beginning on the purchase date, he
The National Security Agency.
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or she disposes of the home or it ceases to be his or her
The Defense Intelligence Agency.
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main home and none of the other exceptions apply.
The National Geospatial-Intelligence Agency.
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Members of the uniformed services or Foreign Service
The National Reconnaissance Office and any other
and employees of the intelligence community (defined on
office within the Department of Defense for the collection
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Instructions for Form 5405 (Rev. 3-2011)
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