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You are choosing to claim the credit on your 2009

and you disposed of the home or it ceased to be your

original or amended return for a main home purchased in

main home in 2010. This includes situations where:

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2010.

You sold the home,

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You are choosing to claim the credit on your 2010

You converted the entire home to business or rental

original or amended return for a main home purchased in

property,

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2011 (and you checked the box on line D).

You abandoned the home,

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The home was destroyed, condemned, or disposed of

Part II. Credit

under threat of condemnation,

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The lender foreclosed on the mortgage, or

Line 1. The purchase price is the adjusted basis of your

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The taxpayer who claimed the credit died in 2010.

home on the date you purchased it. This includes certain

Also complete Part III if you are claiming the credit on

settlement or closing costs (such as legal fees and

your 2010 return and line 12, 13f, 13g, or 13h applies.

recording fees) and your down payment and debt to

Line 11. If your home was destroyed, condemned, or

purchase the home (such as a first or second mortgage

disposed of under threat of condemnation, enter the date

or notes you gave the seller in payment for the home). If

it was destroyed, condemned, or disposed of under

you build, or contract to build, a new home, your

threat of condemnation (or the date it ceased to be your

purchase price includes costs of construction. For more

main home, whichever is earlier).

information about adjusted basis, see Pub. 551, Basis of

Line 12. Check the box if you (or your spouse if

Assets.

married):

If you purchase property with a house that you use as

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Are, or were, a member of the uniformed services or

your personal residence and a separate structure or unit

Foreign Service or an employee of the intelligence

that you do not use as your residence, you must allocate

community (defined on page 3), and

the purchase price between the portion of the property

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Sold the home or the home ceased to be your main

that you use as your residence and the portion of the

home after 2008 because you (or your spouse if married)

property with the separate structure or unit. This includes:

received Government orders to serve on qualified official

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A house that you lived in and a detached garage or

extended duty (defined below).

outbuilding that you use solely for business purposes.

If you (or your spouse if married) meet both of these

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A duplex with two separate dwelling units and you live

conditions, you do not have to repay the credit.

in one unit and rent out the other unit.

Qualified official extended duty. You are on

Enter on line 1 the purchase price allocated to your

qualified official extended duty while:

residence.

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

Line 3. See Who Can Claim the Credit on page 1 to find

your main home, or

out if you can claim the credit as a first-time homebuyer

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Living in Government quarters under Government

or a long-time resident.

orders.

Line 4. If two or more unmarried individuals buy a main

You are on extended duty when you are called or

home, they can allocate the credit among the individual

ordered to active duty for a period of more than 90 days

owners using any reasonable method. If married

or for an indefinite period.

individuals buy a main home and do not claim the credit

Lines 13a, 13b, and 13c. See item 9 under Who

on a joint return, they can also allocate the credit

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

between them using any reasonable method. A

related person. If the person does not meet the definition

reasonable method is any method that does not allocate

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

any part of the credit to a co-owner not eligible to claim

If you sold your home to someone who is not related

that part.

to you, use the worksheet on page 5 to figure the gain or

For first-time homebuyers, the total amount allocated

(loss) on the sale.

cannot exceed the smaller of $8,000 or 10% of the

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

purchase price. For long-time residents, the total amount

converting your entire home to business or rental use.

allocated cannot exceed the smaller of $6,500 or 10% of

the purchase price. For married taxpayers filing separate

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

returns, the amount of the credit allocated to each

the home to rental or business use and you continue to

spouse cannot exceed the smaller of (a) the amount on

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

line 3 or (b) the excess of line 2 over the amount

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

allocated to the other spouse on the other spouse’s Form

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

5405, line 4.

not require you to file this form.

Example 1. You claimed the credit for a home you

Line 5. Your modified adjusted gross income is the

amount from Form 1040, line 38, increased by the total of

purchased in 2009. In 2010, you converted the basement

any:

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

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Exclusion of income from Puerto Rico, and

continued to use the rest of your home as your main

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Amount from Form 2555, lines 45 and 50; Form

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

2555-EZ, line 18; and Form 4563, line 15.

with your 2010 return or file Form 5405.

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

Part III. Disposition or Change of Main

except that you purchased the home in 2008. You must

complete Part IV of Form 5405 because for homes

Home for Which the Credit Was

purchased in 2008, you are required to repay at least 1/

Claimed

15 of the credit with your 2010 return.

Complete Part III if you claimed the first-time homebuyer

Example 3. You claimed the credit for a home you

credit on your original or amended 2008 or 2009 return

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

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Instructions for Form 5405 (Rev. 12-2010)

Draft Instructions For Form 5405 - First-Time Homebuyer Credit And Repayment Of The Credit - 2010 Page 4

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