Instructions For Form 5405 - 2009 (Page 2 of 4) in pdf

phase-out of the credit begins when your MAGI exceeds

Who Cannot Claim the Credit

$125,000 ($225,000 if married filing jointly). The credit is

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

eliminated completely when your MAGI reaches $145,000

($245,000 if married filing jointly).

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

instructions for line 1 on page 3) is more than $800,000. This

What To Attach to Your Return

rule applies to homes purchased after November 6, 2009.

2. Your modified adjusted gross income is:

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

a. $95,000 or more ($170,000 or more if married filing

amended tax return, you must attach the following

jointly) and you purchased your home before November 7,

documentation regarding your main home (as applicable). If

2009, or

you do not attach the documentation, the credit may not be

b. $145,000 or more ($245,000 or more if married filing

allowed.

jointly) and you purchased your home after November 6, 2009.

Attach a copy of your settlement statement showing all

See the instructions for line 5 on page 4.

parties’ names and signatures, the property address, the

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

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

can be claimed as a dependent on another person’s tax return.

your settlement statement is your properly executed Form

This rule applies to homes purchased after November 6, 2009.

HUD-1, Settlement Statement.

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

date of purchase. This rule applies to homes purchased after

If you are unable to obtain a settlement statement because

November 6, 2009.

you purchased a mobile home, attach a copy of your executed

5. You are a nonresident alien.

retail sales contract showing all parties’ names and signatures,

6. Your home is located outside the United States.

the property address, the purchase price, and the date of

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

purchase.

before the end of the year in which you purchased it. This rule

If you are claiming the credit for a newly constructed home

does not apply if you are a member of the uniformed services or

and you do not have an executed settlement statement, attach

Foreign Service, or an employee of the intelligence community

a copy of your certificate of occupancy showing your name, the

on qualified official extended duty as defined in the instructions

property address, and the date of the certificate.

for line 12 on page 4 and you sell the home, or it ceases to be

Additional documentation. You should also attach the

your main home, after 2008. You can claim the credit on the

following documentation, if applicable, to avoid delays in the

return for the year of purchase or choose to claim it on your

processing of your return and the issuance of any refund.

return for the year before the year in which you purchased the

•

If you checked the “Yes” box on line C, attach a copy of the

home if you otherwise qualify for the credit.

pages from a signed contract to make a purchase showing all

8. You acquired the home by gift or inheritance.

parties’ names and signatures, the property address, the

9. You acquired your home from a related person. This

purchase price, and the date of the contract.

includes:

•

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

a. Your spouse, ancestors (parents, grandparents, etc.), or

same main home, attach copies of one of the following: Form

lineal descendants (children, grandchildren, etc.).

1098, Mortgage Interest Statement (or substitute statement),

b. A corporation in which you directly or indirectly own more

property tax records, or homeowner’s insurance records. These

than 50% in value of the outstanding stock of the corporation.

records should be for 5 consecutive years of the 8-year period

c. A partnership in which you directly or indirectly own more

ending on the purchase date of the new main home.

than 50% of the capital interest or profits interest.

For more information about related persons, see the

Repaying the Credit (for Purchases After

discussion under Nondeductible Loss in Chapter 2 of Pub. 544,

Sales and Other Dispositions of Assets. When determining

2008)

whether you acquired your main home from a related person,

If you purchased the home after 2008, you generally must

family members in that discussion (except item 7) include only

repay the credit if, during the 36-month period beginning on the

the people mentioned in 9a above.

purchase date and after the year for which you claim the credit,

10. You acquired your home after November 6, 2009, from a

you dispose of the home or it ceases to be your main home.

person related to your spouse. This includes your spouse’s

This includes situations where you sell the home, you convert

ancestors or lineal descendants (for example your

the entire home to business or rental property, the home is

parents-in-law or your stepchildren), and any relationships

destroyed, condemned, or disposed of under threat of

described in 9b or 9c above that your spouse has.

condemnation, or the lender forecloses on the mortgage.

You repay the credit by including it as additional tax on the

Amount of the Credit

return for the year you dispose of the home or it ceases to be

your main home. However, if the home is destroyed,

First-time homebuyer. Generally, the credit is the smaller of:

•

condemned, or disposed of under threat of condemnation, and

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

•

you do not acquire a new home within 2 years of the event, you

10% of the purchase price of the home.

must repay the entire repayment amount with the return for the

Long-time resident of the same main home. Generally, the

year in which the 2-year period ends.

credit is the smaller of:

•

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

If you own the home and use it as your main home for at

•

10% of the purchase price of the home.

TIP

least 36 months beginning on the purchase date, you do

not have to repay any of the credit or file Form 5405

Phase-out of the credit for homes purchased before

again.

November 7, 2009. You are allowed the full amount of the

credit if your modified adjusted gross income (MAGI) is $75,000

If you and your spouse claim the credit on a joint return,

or less ($150,000 or less if married filing jointly). The phase-out

each spouse is treated as having been allowed half of the credit

of the credit begins when your MAGI exceeds $75,000

for purposes of repaying the credit.

($150,000 if married filing jointly). The credit is eliminated

Exceptions. The following are exceptions to the repayment

completely when your MAGI reaches $95,000 ($170,000 if

rule.

married filing jointly).

•

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

Phase-out of the credit for homes purchased after

the repayment in the year of sale is limited to the amount of

November 6, 2009. You are allowed the full amount of the

gain on the sale. The amount of the credit in excess of the gain

credit if your modified adjusted gross income (MAGI) is

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

$125,000 or less ($225,000 or less if married filing jointly). The

Claim the Credit on this page for the definition of a related

-2-

Instructions for Form 5405 (2009)

Instructions For Form 5405 - 2009 Page 2

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