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Screen 5405 - First-Time Homebuyer Credit Repayment (1040)
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Form 5405 - General Information
Address / City, state, zip code
Enter the address of the principal residence for which the credit recapture will be applied if different from the address reported in the
1040
screen.Form 5405 - Repayment, Disposition, or Change in User of Main Home
Use this section to enter information if the taxpayer claimed the first-time homebuyer credit in a prior year and the home was sold or no longer used as the principal residence, and to calculate the repayment of first-time homebuyer credit claimed in tax year 2008.
Owner of the home in which the first-time homebuyer credit was taken
Enter
T
or S
in this field to indicate whether the Form 5405 information you're entering pertains to the taxpayer or the spouse. Complete this field when the First-Time Homebuyer Credit was claimed in a prior year and the taxpayer and spouse were not married on the purchase date.First-time homebuyer credit taken
Enter the amount of the first-time homebuyer credit that was claimed in a prior year. The credit displayed may be subject to credit recapture in the current or future years. If the home was sold or no longer used as the taxpayer's principal residence in the current tax year, select a reason from
Reason for disposition or change of main home
.note
- The application proformas the prior year credit information including the amount of the credit taken, date acquired, and year the credit was taken. Homes purchased in 2008 are subject to a 15 year recapture beginning in 2010. Homes purchased after 2008 are only subject to a recapture if the home ceases to be the principal residence within 36 months from the date of purchase. The application automatically calculates the 2008 annual repayment and produce a Repayment of Credit Claimed in 2008 worksheet.
- A custom paragraph may be selected to notify the taxpayer of the First-time Homebuyer's credit recapture included in the return. To select this custom paragraph on a client basis, select custom paragraphForm 5405 (TL)from one of theParagraph Descriptionfieldviews in theLetterscreen. To select this custom paragraph to print for all clients, selectSetup,1040 Individual,Federaltab, select eitherTransmittal LetterorFiling Instructions, select theCustom Paragraphstab, and mark theForm 5405 (TL)box.
Member of U.S. uniformed services, Foreign Service, or intelligence community and home...
Enter
X
in the field if the taxpayer was a member of the U.S. uniformed services, Foreign Service, or intelligence community and sold the home in connection with government orders for qualified official extended duty service. Box 2
is marked on Form 5405.Reason for disposition or change of main home
Select the reason for the disposition or change in status of the main home. When you select a reason, the corresponding box on Form 5405, line 3, is marked.
note
If the home was sold to an unrelated person or transferred to the taxpayer's ex-spouse through a divorce settlement, additional information is required to complete Form 5405 Part II.
Code | Description |
|---|---|
A | Home sold to unrelated party, gain |
B | Home sold to related party, loss |
C | Home sold to related party, or given to someone other than spouse |
D | Home converted to rental, business, no longer used as main home |
E | Home transferred due to divorce settlement |
F | Home destroyed or condemned. Will acquire new home within 2 years |
G | Home destroyed or condemned. Won't acquire new home within 2 years |
H | Taxpayer/Spouse deceased |
Use sale information for Screen Home
If the principal residence was sold using the
Home
screen and the home sold is the same home used to claim the First-time Homebuyer Credit, the application uses data entered in the Date former home was sold
, Selling price
, and Basis of home sold
fields on the Home
screen to calculate the gain or loss on the home sold.Date sold or no longer used as principal residence
Enter the date in MM/DD/YYYY format in which the home claimed for the first-time homebuyer credit in the prior year was sold or no longer used as the principal residence. The application transfers this date to Form 5405, line 1.
note
- If the home claimed in a prior year was sold or is no longer the principal residence, the taxpayer may be subject to credit recapture. CompleteForm 5405 - Prior Year Credit Informationsection. This information will proforma from the prior year if information was entered in the prior year.
- This field is turned off whenUse sale information from Screen Homehas data. The application uses the data on theHomescreen to calculate any recapture.
- A custom paragraph may be selected to notify the taxpayer of any recapture due to the home no longer used as the principal residence. To select this custom paragraph on a client basis, select custom paragraphForm 5405 (TL)from one of theParagraph Descriptionfieldviews in theLetterscreen. To select this custom paragraph to print for all clients, selectSetup,1040 Individual,Federaltab, select eitherTransmittal LetterorFiling Instructions, select theCustom Paragraphstab, and mark theForm 5405 (TL)box.
Selling price of home
If the home was sold to an unrelated person, enter the selling price of the home used to claim the first-time homebuyer credit in the prior year. The application uses this amount to calculate the gain on the sale of home. This field will need to be completed if the home was sold to an unrelated party.
note
This field is turned off when
Use sale information from Screen Home
has data. Instead, the application uses the data on the Home
screen.Expense of sale
Use this field to enter any expenses incurred in selling the home. Don't include expenses incurred while preparing the home for sale.
note
This field is turned off when
Use sale information from Screen Home
has data. Instead, the application uses the data on the Home
screen.Basis of home
If the home was sold to an unrelated person, enter the basis of the home used to claim the First-time Homebuyer credit in a prior year if different from the purchase price. The application uses this amount to calculate the gain on the sale of the home.
note
This field is turned off when
Use sale information from Screen Home
has data. Instead, the application uses the data on the Home
screen.Ownership percentage, if not 100%
Enter a percentage in this field if the property isn't 100 percent owned. This percentage affects the selling price, expense of sale, and basis of home. When you enter 100 percent of the selling price, expenses, and basis of home, the application applies the ownership percentage to the amount in each field.
Were the taxpayer and spouse married on the purchase date?
Enter
1
(yes) or 2
(no) to indicate if the taxpayer and spouse were married at the date the principal residence was purchased.Ex-spouse's full name
Enter the full name of the ex-spouse if the home was transferred due to a divorce settlement. The application reports the name on Form 5405, line 3e.
Year spouse died
Select the year if the First-Time Homebuyer credit was claimed on a joint return in a prior year and either the taxpayer or spouse has died. The application reduces the repayment amount of the surviving spouse's portion to half of the credit claimed on Form 5405.
note
If the home was sold or no longer used as the principal residence and
Year spouse deceased
has a year entered, complete the fields in the Form 5405 - Repayment, Disposition, or Change in Use of Main Home
section. Don't adjust the amount in First-time homebuyer credit taken
. The application automatically adjusts the credit amount entered. If the home remains the principal residence for the surviving spouse, the application reduces the annual repayment by one-half, the surviving spouse's portion.Accelerated recapture first-time homebuyer credit (Force)
To override (force) the calculated recapture of the first-time homebuyer credit, enter the amount of accelerated recapture of the first-time homebuyer credit. The application reports this amount as additional taxes on Form 1040 without review of credit recapture amount on Form 5405.
note
For homes purchased in 2008, the application calculates the annual 15-year repayment amount on the First-Time Homebuyer Credit Worksheet. If the taxpayer wishes to enter more or less than the calculated repayment amount, enter the amount in this field.
Prior year payment made
For homes purchased in 2008, enter the amount repaid in prior years.