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and converted it to rental property. You must check the

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

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

the appropriate box on lines 13a through 13g. (These

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

instructions also apply if you are not filing a joint return

with the deceased taxpayer for 2010.)

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

except that you purchased the home in 2008. You must

Part IV. Repayment of Credit Claimed

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

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

for 2008 or 2009

return.

If you purchased the home in 2008 and you owned it and

Line 13f. If you purchased the home in 2009 (or a later

used it as your main home during all of 2010, you must

year), you do not have to repay the credit if you acquire a

begin repaying the credit with your 2010 tax return. See

new main home within 2 years of the event and you own

the instructions for line 16b.

and use it as your main home during the remainder of the

If you are required to repay the credit because you

36-month period.

disposed of a home you purchased in 2008 or 2009 or

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

that home ceased to be your main home, you generally

2-year period, the following rules apply.

must repay the entire credit with your 2010 tax return. An

•

If you purchased the home in 2008 and the event

exception applies if your home was destroyed,

occurred before 2009, you generally must repay the

condemned, or disposed of under threat of

credit in full with your 2010 return. Complete Part IV and

condemnation, and you did not acquire a new main home

check the box on line 16a. For an exception, see Home

within 2 years of the event. (See the instructions for line

sold under threat of condemnation below.

13g earlier.) Another exception applies for certain

•

If you purchased the home in 2008 and the event

members of the uniformed services or Foreign Service or

occurred after 2008, you must repay at least 1/15 of the

employees of the intelligence community (see the

credit each year (starting with your 2010 tax return) until

instructions for line 12 on page 4).

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

Line 14. If you claimed the credit on a joint return for

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

2008 or 2009 but your spouse died, enter one-half of the

must include all remaining installments as additional tax.

credit you claimed on Form 5405 for 2008 or 2009. The

Complete Part IV and check the box on line 16b.

•

remaining half (that is, your spouse’s half) does not have

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

to be repaid. If you and your spouse claimed the credit

you must include the credit as additional tax on the tax

for 2008 or 2009 and the home was later transferred to

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

you as part of a divorce settlement, enter the total credit

Home sold under threat of condemnation. If you

claimed for 2008 or 2009 by both you and your

sold your home under the threat of condemnation to a

ex-spouse.

person who is not related to you and you do not acquire a

Enter the credit you claimed for a home purchased in

new home within the 2-year replacement period, the

2008 that you sold under threat of condemnation. If the

amount of the credit you have to repay is limited to the

buyer is related to you, skip line 15 and go to line 16. If

gain on the sale. If you do not have a gain, you do not

the buyer is not related to you, go to line 15. Item (9

have to repay any of the credit. Use the worksheet below

)under Who Cannot Claim the Credit on page 2 explains

to determine whether you have a gain.

whether the buyer is related to you.

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

return for 2010 with the deceased taxpayer and you

Line 15. If either of the following conditions applies,

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

enter on line 15 the gain from line 7 of the worksheet on

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

page 5.

•

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

You checked the box on line 13a.

Form 5405 Gain or (Loss) Worksheet

Keep for Your Records

Note: Use only if you sold your home to someone who is not related to you (including a sale under threat of

condemnation if you checked the box on line 13g). See Pub. 523, Selling Your Home, for information on what to enter

on lines 1, 2, and 4.

1. Selling price of home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.

2. Selling expenses (including commissions, advertising, and legal fees, and seller-paid loan charges) . . . . . . 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 (but if you sold the

home under threat of condemnation, check box 13g instead). Also enter the result on line 15 and complete

the rest of Part IV.

•

If line 7 is -0- or less, check the box on line 13b of Form 5405 (but if you sold the home under threat of

condemnation, check box 13g instead). Do not complete Part IV if you checked the box on line 13b. If you

checked the box on line 13g, complete line 14, enter -0- on lines 15 and 16, and check the box on line 16a.

-5-

Instructions for Form 5405 (Rev. 12-2010)

Draft Instructions For Form 5405 - First-Time Homebuyer Credit And Repayment Of The Credit - 2010 Page 5

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