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First-Time Home Buyer Credit

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Question
First-Time Home Buyer Credit

Answer

First-Time Home Buyer Credit - You can use this form to make a payment on the credit you took.

Repayment of the Credit.  If you are repaying the credit with your tax return, you are required to file form 5405 only if:

  • You disposed of your home or you ceased using the home as your main home in the tax year, or
  • You purchased your home in 2008, it was destroyed, or you sold it through condemnation or under threat of condemnation, and you did  not purchase a new home within 2 years of the event.

Amount of Credit. 

First Time Homebuyer.  Generally the credit is the smaller of:

  • $8,000 ($4,000 if married filing separately), or
  • 10% of the purchase price of the home.

Long-time resident of the same main home.  Generally, the credit is the smaller of:

  • $6,500 ($3,250 if married filing separately), or
  • 10% of the purchase price of the home.

 

 

You must file Form 5405 with your 2020 tax return if you purchased your home in 2008 and you meet either of the following conditions.

1. You disposed of it in 2020.

2. You ceased using it as your main home in 2020. But see Exceptions, later.

In all other cases, you aren't required to file Form 5405. Instead, enter the repayment on 2020 Schedule 2 (Form 1040), line 7b. For example, you aren't required to file Form 5405 if you are making an installment payment of the credit you claimed for a home you purchased in 2008, and you owned and used the home as your main home during all of 2020.

 

 

 


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Views: 2008 Created on: Jun 15, 2013
Date updated: Dec 04, 2020
Posted in: Credits

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