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When you convert your entire home to business

2. Were a member of the uniformed services or

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

Foreign Service or an employee of the intelligence

TIP

your main home. The home is used for business if

community (defined on the page) during the time period

you use it for an activity that you carry on to make a

in (1) above.

profit. The facts and circumstances of each case

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

determine whether or not an activity is a business.

purchase your home during the time periods listed on

You repay the credit by including it as additional tax on

page 1 in item 1, under First-time homebuyer, and in item

the return for the year you dispose of the home or it

2, under Long-time resident of the same main home.

ceases to be your main home. However, if the home is

Instead, you can qualify for the credit if you purchase

destroyed, condemned, or disposed of under threat of

your main home:

condemnation, and you do not acquire a new home

1. Before May 1, 2011, or

within 2 years of the event, you must repay the entire

2. After April 30, 2011, and before July 1, 2011, and

repayment amount with the return for the year in which

you enter into a binding contract before May 1, 2011, to

the 2-year period ends.

purchase the property before July 1, 2011.

If you and your spouse claim the credit on a joint

Uniformed services. The uniformed services are:

return, each spouse is treated as having been allowed

•

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

half of the credit for purposes of repaying the credit.

Corps, and Coast Guard),

Exceptions. The following are exceptions to the

•

The commissioned corps of the National Oceanic and

repayment rule.

Atmospheric Administration, and

•

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

•

The commissioned corps of the Public Health Service.

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

Foreign Service member. For purposes of the

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

excess of the gain does not have to be repaid. (See item

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

9 under Who Cannot Claim the Credit on page 2 for the

are any of the following.

•

definition of a related person.)

A Chief of mission.

•

If the home is destroyed, condemned, or disposed of

An Ambassador at large.

•

under threat of condemnation, you do not have to repay

A member of the Senior Foreign Service.

•

the credit if you purchase a new main home within 2

A Foreign Service officer.

•

years of the event and you own and use it as your new

Part of the Foreign Service personnel.

main home during the remainder of the 36-month period.

Employee of the intelligence community. For

•

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

purposes of the credit, you are an employee of the

part of a divorce settlement), the spouse who receives

intelligence community if you are an employee of any of

the home is responsible for repaying the credit if, during

the following.

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

•

The Office of the Director of National Intelligence.

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

•

The Central Intelligence Agency.

main home and none of the other exceptions apply.

•

The National Security Agency.

•

Members of the uniformed services or Foreign Service

•

The Defense Intelligence Agency.

and employees of the intelligence community (defined on

•

The National Geospatial-Intelligence Agency.

this page) do not have to repay the credit if, after 2008,

•

The National Reconnaissance Office and any other

they sell the home or the home ceases to be their main

office within the Department of Defense for the collection

home because they received Government orders to

of specialized national intelligence through

serve on qualified official extended duty (see the

reconnaissance programs.

instructions for line 12 on page 4).

•

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

•

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

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

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

Investigation, the Department of the Treasury, the

your surviving spouse would be required to repay his or

Department of Energy, and the Coast Guard.

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

•

The Bureau of Intelligence and Research of the

beginning on the purchase date, he or she disposes of

Department of State.

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

•

Any of the elements of the Department of Homeland

none of the other exceptions apply.

Security concerned with the analyses of foreign

intelligence information.

Qualified official extended duty. You are on

Specific Instructions

qualified official extended duty while:

•

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

Part I. General Information

your main home, or

•

Living in Government quarters under Government

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

orders.

date you first occupied it if you constructed your main

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

home).

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

Line C. See What To Attach to Your Return on page 2.

Otherwise, check the “No” box.

Line D. You have additional time to purchase a home if

For the definition of a related person or a person

you (or your spouse if married):

related to your spouse, see item 9 or 10 on page 2 under

1. Were on qualified official extended duty (defined on

Who Cannot Claim the Credit.

this page) outside the United States for at least 90 days

during the period beginning after December 31, 2008,

Line F. Check the box if you are making one of the

and ending before May 1, 2010, and

following choices.

-3-

Instructions for Form 5405 (Rev. 12-2010)

Draft Instructions For Form 5405 - First-Time Homebuyer Credit And Repayment Of The Credit - 2010 Page 3

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