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You generally must repay the credit if, after the year

the home or it ceases to be his or her main home and

for which you claim the credit, you dispose of the home

none of the other exceptions apply.

or it ceases to be your main home during the 36-month

period beginning on the purchase date. This includes

Specific Instructions

situations where you sell the home (including through

foreclosure), you convert the entire home to business or

rental use, the home is destroyed or condemned, or you

Part I. General Information

dispose of the home under threat of condemnation.

Line B. Enter the date you purchased the home (or the

When you convert your entire home to business

date you first occupied it if you constructed your main

or rental use, you no longer use any part of it as

TIP

home).

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

profit. The facts and circumstances of each case

Line D. Check the “Yes” box if you (or your spouse if

determine whether or not an activity is a business.

married):

1. Were on qualified official extended duty (defined

You repay the credit by including it as additional tax on

below) 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 or condemned, or you dispose of the home

2. Were a member of the uniformed services or

under threat of condemnation, and you do not acquire a

Foreign Service or an employee of the intelligence

new home within 2 years of the event, you must repay

community (defined below) during the time period in (1)

the entire repayment amount with the return for the year

above.

in which the 2-year period ends.

If you and your spouse claim the credit on a joint

If you do not meet both (1) and (2) above, you cannot

return, each spouse is treated as having been allowed

claim the credit.

half of the credit for purposes of repaying the credit.

Qualified official extended duty. You are on

qualified official extended duty while:

Exceptions. The following are exceptions to the

•

Serving at a duty station that is at least 50 miles from

repayment rule.

•

your main home, or

If you sell the home to someone who is not related to

•

Living in Government quarters under Government

you, the repayment in the year of sale is limited to the

orders.

amount of gain on the sale as determined in Part V of

Form 5405. The amount of the credit in excess of the

Uniformed services. The uniformed services are:

•

gain does not have to be repaid. (See item 9 under Who

The Armed Forces (the Army, Navy, Air Force, Marine

Cannot Claim the Credit on page 2 for the definition of a

Corps, and Coast Guard),

•

related person.)

The commissioned corps of the National Oceanic and

•

If the home is destroyed or you sell the home through

Atmospheric Administration, and

•

condemnation or under threat of condemnation, you do

The commissioned corps of the Public Health Service.

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

Foreign Service member. For purposes of the

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

credit, you are a member of the Foreign Service if you

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

are any of the following.

period.

•

A Chief of mission.

•

If the home is destroyed or you sell the home through

•

An Ambassador at large.

condemnation or under threat of condemnation to

•

A member of the Senior Foreign Service.

someone who is not related to you and you do not

•

A Foreign Service officer.

acquire a new home within the 2-year period, the

•

Part of the Foreign Service personnel.

repayment with your return for the year in which the

Employee of the intelligence community. For

2-year period ends is limited to the gain on the

purposes of the credit, you are an employee of the

disposition as determined in Part V of Form 5405. The

intelligence community if you are an employee of any of

amount of the credit in excess of the gain does not have

the following.

to be repaid. (See item 9 under Who Cannot Claim the

•

The Office of the Director of National Intelligence.

Credit on page 2 for the definition of a related person.)

•

The Central Intelligence Agency.

If the home is transferred to a spouse (or ex-spouse as

•

The National Security Agency.

part of a divorce settlement), the spouse who receives

•

The Defense Intelligence Agency.

the home is responsible for repaying the credit if, during

•

The National Geospatial-Intelligence Agency.

the 36-month period beginning on the purchase date, he

•

The National Reconnaissance Office and any other

or she disposes of the home or it ceases to be his or her

office within the Department of Defense for the collection

main home and none of the other exceptions apply.

•

of specialized national intelligence through

Members of the uniformed services or Foreign Service

reconnaissance programs.

and employees of the intelligence community (defined on

•

Any of the intelligence elements of the Army, the Navy,

this page), and spouses of such individuals do not have

the Air Force, the Marine Corps, the Federal Bureau of

to repay the credit if, after 2008, they sell the home or the

Investigation, the Department of the Treasury, the

home ceases to be their main home because they

Department of Energy, and the Coast Guard.

received Government orders to serve on qualified official

•

The Bureau of Intelligence and Research of the

extended duty (see the instructions for line 12 on page

Department of State.

4).

•

Any of the elements of the Department of Homeland

If you die, repayment of the credit is not required. If

Security concerned with the analyses of foreign

you claimed the credit on a joint return and then you die,

intelligence information.

your surviving spouse would be required to repay his or

Line E. Check the “Yes” box if you purchased the home

her half of the credit if, during the 36-month period

beginning on the purchase date, he or she disposes of

from a related person or a person related to your spouse.

-3-

Instructions for Form 5405 (Rev. 12-2011)

Instructions For Form 5405 - First-Time Homebuyer Credit And Repayment Of The Credit - 2011 Page 3

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