Instructions For Form 5405 - (Rev. March 2011) (Page 5 of 6) in pdf

related person. If the person does not meet the definition

credit you have to repay (if any) is limited to the gain on

of a related person, that person is not related to you.

the disposition. Check the box on line 13a if you have a

gain, in addition to the box you check on line 13f or line

If you sold your home to someone who is not related

13g. If you do not have a gain, you do not have to

to you, use the worksheet below to figure the gain or

repay any of the credit. Check the box on line 13b if you

(loss) on the sale.

do not have a gain, in addition to the box you check on

Line 13d. See the Tip on page 3 for information about

line 13f or 13g. Use the worksheet below to determine

converting your entire home to business or rental use.

whether you have a gain.

Do not check this box if you converted only a part of

Line 13f. If you acquired or plan to acquire a new

the home to rental or business use and you continue to

home within 2 years of the event, the following rules

use the other part as your main home. If you purchased

generally apply.

your home in 2008, complete Part IV. If you purchased

•

For homes purchased in 2008, repayment of the credit

your home in 2009 or a later year, this conversion does

over a 15-year period begins with your 2010 tax return.

not require you to file this form.

Check the box on line 16b.

•

Example 1. You claimed the credit for a home you

For homes purchased in 2009 or a later year, you do

purchased in 2009. In 2010, you converted the basement

not have to repay the credit if you acquire a new main

of your home for use as a child care business. You

home within 2 years of the event and you own and use it

continued to use the rest of your home as your main

as your main home during the remainder of the 36-month

home in 2010. You do not have to repay any of the credit

period. You may have to repay the credit if you do not

with your 2010 return or file Form 5405.

acquire a new main home within 2 years of the event.

Line 13g. If you do not acquire a new home within

Example 2. The facts are the same as in Example 1,

the 2-year period, the following rules generally apply.

except that you purchased the home in 2008. You must

•

If you purchased the home in 2008 and the event

complete Part IV of Form 5405 because for homes

occurred in 2008, you generally must repay the credit in

purchased in 2008, you are required to repay at least

full with your 2010 return. Complete Part IV and check

1/15 of the credit with your 2010 return.

the box on line 16a.

Example 3. You claimed the credit for a home you

•

If you purchased the home in 2008 and the event

purchased in 2009. In 2010, you moved out of the home

occurred after 2008, your annual payment requirement

and converted it to rental property. You must check the

begins starting with your 2010 return and continues until

box on line 13d and complete Part IV to figure the

the year in which the 2-year period ends. On the tax

amount of credit you have to repay with your 2010 return.

return for the year in which the 2-year period ends, you

Example 4. The facts are the same as in Example 3

must include all remaining installments as additional tax.

except that you purchased the home in 2008. You must

•

If you purchased the home in 2009 (or a later year) you

check the box on line 13d and complete Part IV. In this

must generally include the credit as additional tax on the

case, you must repay the entire credit with your 2010 tax

tax return for the year in which the 2-year period ends.

return.

Line 13h. Do not check this box if you are filing a joint

Lines 13f and 13g—Home destroyed or sold through

return for 2010 with the deceased taxpayer and you

condemnation or under threat of condemnation.

claimed the credit on a joint return. If you did not dispose

If your home was destroyed or you sold your home

of the home and the home did not cease to be your main

through condemnation or under threat of condemnation

home, do not check any box on line 13. If you did dispose

to a person who is not related to you, the amount of the

of the home or it ceased to be your main home, check

Form 5405 Gain or (Loss) Worksheet

Keep for Your Records

Note: Use only if your home was destroyed or you sold your home to someone who is not related to you (including

a sale through condemnation or under threat of condemnation). See Pub. 523, Selling Your Home, for information on

what to enter on lines 1, 2, and 4. But if you sold your home through condemnation, see chapter 1 in Pub. 544, Sales

and Other Dispositions of Assets, for information on what to enter on lines 1 and 2.

1. Selling price of home, insurance proceeds, or gross condemnation award . . . . . . . . . . . . . . . . . . . . . . . . . 1.

2. Selling expenses (including commissions, advertising, and legal fees, and seller-paid loan charges) or

expenses in getting the condemnation award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.

3. Subtract line 2 from line 1. This is the amount realized on the sale of the home . . . . . . . . . . . . . . . . . . . . . 3.

4. Adjusted basis of home sold (from line 13 of Worksheet 1 in Pub. 523) . . . . . . . . . . . . . . 4.

5. Enter the first-time homebuyer credit claimed on Form 5405 . . . . . . . . . . . . . . . . . . . . . . 5.

6. Subtract line 5 from line 4. This is the adjusted basis for purposes of repaying the credit . . . . . . . . . . . . . . . 6.

7. Subtract line 6 from line 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.

•

If line 7 is more than -0-, you have a gain. Check the box on line 13a of Form 5405. Also check the box on

line 13f or 13g, whichever applies, if the home was destroyed or you sold the home through condemnation or

under threat of condemnation. Enter the result on line 15 and complete the rest of Part IV. However, if you

purchased the home in 2009 and it was destroyed or you sold it through condemnation or under threat of

condemnation to an unrelated person, check only the box on line 13f or 13g; do not check the box on line

13a or complete Part IV.

•

If line 7 is -0- or less, check the box on line 13b of Form 5405. Also check the box on line 13f or 13g,

whichever applies, if the home was destroyed or you sold the home through condemnation or under threat of

condemnation.

-5-

Instructions for Form 5405 (Rev. 3-2011)

Instructions For Form 5405 - (Rev. March 2011) Page 5

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