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Instructions for Form 5405

(Rev. November 2024)
Repayment of the First-Time Homebuyer Credit

Section references are to the Internal Revenue Code unless Condemnation or threat of condemnation. If the home is
otherwise noted. destroyed in 2024, or you sell the home in 2024 through
condemnation, or under threat of condemnation, to someone
Future Developments who isn't related to you, the repayment with your return for the
year is limited to the gain on the disposition, as determined in
For the latest information about developments related to Part III of Form 5405. The amount of the credit in excess of
Form 5405 and its instructions, such as legislation enacted the gain doesn't have to be repaid. (See Related Persons,
after they were published, go to IRS.gov/Form5405. later.)
Transfer to spouse or ex-spouse. If the home was
What’s New transferred to a spouse (or ex-spouse as part of a divorce
2024 is the last year to file Form 5405. The 15-year settlement), the spouse who received the home is
repayment period for homes purchased in 2008 began with responsible for repaying the credit (regardless of whether he
your 2010 tax return and ends with your 2024 tax return. The or she was the purchaser) if none of the other exceptions
2024 revision is the last revision of Form 5405 and these apply.
instructions. Person who claimed the credit dies. If a person who
claimed the credit dies, repayment of the remaining balance
Reminder of the credit isn't required unless the credit was claimed on a
joint return. If the credit was claimed on a joint return, then the
Repayment requirement. The repayment requirement has surviving spouse is required to continue repaying his or her
expired for homes purchased after 2008. The repayment half of the credit (regardless of whether he or she was the
requirement continues to apply to homes purchased in 2008. purchaser) if none of the other exceptions apply.

Related Persons
General Instructions
Related persons include the following.
Purpose of Form 1. Your spouse, ancestors (parents, grandparents, etc.),
Use Form 5405 to do the following. or lineal descendants (children, grandchildren, etc.).
• Notify the IRS that the home you purchased in 2008 and 2. A corporation in which you directly or indirectly own
for which you claimed the credit was disposed of or ceased to more than 50% in value of the outstanding stock of the
be your main home in 2024. Complete Part I and, if corporation.
applicable, Parts II and III. 3. A partnership in which you directly or indirectly own
• Figure the amount of the credit you must repay with your more than 50% of the capital interest or profits interest.
2024 tax return. Complete Part II and, if applicable, Part III.
For more information about related persons, see the
Who Must File discussion under Nondeductible Loss in chapter 2 of Pub.
You must file Form 5405 with your 2024 tax return if you 544, Sales and Other Dispositions of Assets. When
purchased your home in 2008 and you meet either of the determining whether you acquired your main home from a
following conditions. related person, family members in that discussion include
1. You disposed of it in 2024. only the people mentioned in (1) above.
2. You ceased using it as your main home in 2024.
But see Exceptions, later. Specific Instructions

In all other cases, you aren't required to file Form 5405. Part I. Disposition or Change in Use
Instead, enter the repayment on 2024 Schedule 2 (Form
1040), line 10. For example, you aren't required to file Form of Main Home for Which the Credit
5405 if you are making an installment payment of the credit Was Claimed
you claimed for a home you purchased in 2008, and you
Complete Part I if you claimed the first-time homebuyer credit
owned and used the home as your main home during all of
for a home purchased in 2008 and either you disposed of the
2024.
home or it ceased to be your main home in 2024. This
Credit claimed on a joint return. If you and your spouse includes situations where:
claimed the credit on a joint return, each spouse is treated as • You sold the home (including through foreclosure);
having been allowed half of the credit for purposes of • You converted the entire home to business or rental
repaying the credit. Each spouse who meets either condition property;
1 or 2 above must file a separate Form 5405. • You abandoned the home (except in connection with a sale
or foreclosure);
Exceptions • The home was destroyed, condemned, or disposed of
The following are exceptions to the repayment rule. under threat of condemnation; or
Instructions for Form 5405 (Rev. 11-2024) Catalog Number 54378F
Jul 23, 2024 Department of the Treasury Internal Revenue Service www.irs.gov

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• The taxpayer who claimed the credit died in 2024. • Any of the intelligence elements of the Army, the Navy, the
Air Force, the Marine Corps, the Federal Bureau of
Sales (including through foreclosure). In the case of a
Investigation, the Department of the Treasury, the
sale (including through foreclosure) of your main home, you
Department of Energy, and the Coast Guard.
must repay the credit with the tax return for the tax year in
which the sale is completed. In general, this will occur when • The Bureau of Intelligence and Research of the
Department of State.
the purchaser (or lender) obtains title to your home.
• Any of the elements of the Department of Homeland
Name and social security number. Enter your name and Security concerned with the analyses of foreign intelligence
social security number. Each spouse who meets condition 1 information.
or 2 earlier under Who Must File must file a separate Form
Lines 3a, 3b, and 3c. If you sold your home to someone
5405. Each spouse must enter only his or her name and
who isn't related to you, complete Part III to figure the gain or
social security number on his or her separate Form 5405.
(loss) on the sale. (The person isn't related to you if he or she
This is true whether a joint return or separate returns are filed.
doesn't meet the definition under Related Persons, earlier.)
Line 1. If your home was destroyed or condemned, or you The repayment is limited to the amount of gain. The amount
disposed of the home under threat of condemnation, enter of the credit in excess of the gain doesn't have to be repaid.
the date it was destroyed, condemned, or disposed of under
Line 3d. See the Tip below for information about converting
threat of condemnation (or the date it ceased to be your main
home, whichever is earlier). your entire home to business or rental use.
Don't check this box if you converted only a part of the
Line 2. Check the box if you (or your spouse, if married): home to rental or business use and you continue to use the
• Are, or were, a member of the uniformed services or other part as your main home. Don't file Form 5405 for this
Foreign Service or an employee of the intelligence conversion. Enter your annual repayment on your 2024
community (defined below); and Schedule 2 (Form 1040), line 10.
• Sold the home or the home ceased to be your main home
after 2008 because you (or your spouse, if married) received Example 1. You claimed the credit for a home you
U.S. Government orders to serve on qualified official purchased in 2008. In January 2024, you converted the
extended duty (defined next). basement of your home for use as a child care business. You
If you (or your spouse, if married) meet both of these continued to use the rest of your home as your main home in
conditions, you (and your spouse, if married) don't have to 2024. You are required to repay one-fifteenth ( / ) of the 1 15
repay the credit. credit with your 2024 return. You don't have to file Form 5405.
Qualified official extended duty. You are on qualified Instead, enter the repayment on your 2024 Schedule 2 (Form
official extended duty while: 1040), line 10.
• Serving at a duty station that is at least 50 miles from your
Note. If you chose to repay more than the minimum amount
main home, or
with any prior tax return(s), see Repaying more than the
• Living in U.S. Government quarters under U.S.
minimum amount, later, for information on the final payment
Government orders.
on your 2024 tax return.
You are on extended duty when you are called or ordered to
active duty for a period of more than 90 days or for an Example 2. You claimed the credit for a home you
indefinite period. purchased in 2008. In January 2024, you moved out of the
Uniformed services. The uniformed services are: home and converted it to rental property. You must check the
• The Armed Forces (the Army, Navy, Air Force, Marine box on line 3d and complete Part II. You must repay the
Corps, and Coast Guard), balance of the credit with your 2024 tax return.
• The commissioned corps of the National Oceanic and When you convert your entire home to business or
Atmospheric Administration, and TIP rental use, you no longer use any part of it as your
• The commissioned corps of the Public Health Service. main home. The home is used for business if you use
Foreign Service member. For purposes of the credit, you it for an activity that you carry on to make a profit. The facts
are a member of the Foreign Service if you are any of the and circumstances of each case determine whether or not an
following. activity is a business.
• A Chief of mission.
• An Ambassador at large. Line 3e. Check the box on line 3e if you meet either of the
• A member of the Senior Foreign Service. following conditions.
• A Foreign Service officer. • You transferred the home to your spouse.
• Part of the Foreign Service personnel. • You and your spouse divorced and you transferred the
Employee of the intelligence community. For purposes home to your ex-spouse as part of the divorce settlement.
of the credit, you are an employee of the intelligence Include the full name of your ex-spouse in the space
community if you are an employee of any of the following. provided.
• The Office of the Director of National Intelligence. The spouse who received the home is responsible for
• The Central Intelligence Agency. repaying the credit under the rules provided in these
• The National Security Agency. instructions.
• The Defense Intelligence Agency.
• The National Geospatial-Intelligence Agency. Lines 3f and 3g—Home destroyed or sold through con-
• The National Reconnaissance Office and any other office demnation or under threat of condemnation. If your
within the Department of Defense for the collection of home was destroyed or you sold your home through
specialized national intelligence through reconnaissance condemnation, or under threat of condemnation, to a person
programs. who isn't related to you, the amount of the credit you have to
repay (if any) is limited to the gain on the disposition.

2 Instructions for Form 5405 (Rev. 11-2024)

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Complete Part III to determine whether you have a gain.         ex-spouse as part of a divorce settlement), enter the total 
Check the box on line 3f if you have a gain. If you don't have  credit claimed by both you and your spouse (or ex-spouse).
a gain, you don't have to repay any of the credit. Check          Enter the credit you claimed for a home that was 
the box on line 3g if you don't have a gain. Then read the      destroyed or that you sold through condemnation or under 
instructions below for line 3f or line 3g, whichever applies.   threat of condemnation.
Line 3f. Complete Part II to figure your installment 
payment for 2024. However, if the buyer is related to you, skip Line 6. If you checked the box on line 3f and the event 
line 7 in Part II to repay the entire remaining amount of the   wasn't a sale to a related person (defined earlier), go to 
credit you claimed. See Related Persons, earlier.               line 7.
If the event occurred before 2024, your annual repayment          If you checked the box on line 3f or line 3g and the event 
requirement with your 2024 return will be your final payment.   was a sale to a related person (defined earlier), skip line 7 
You don’t have to file Form 5405. Instead, enter the            and go to line 8.
repayment on your 2024 Schedule 2 (Form 1040), line 10.         Line 7. If any of the following conditions apply, enter on 
Line 3g. If you don't have a gain, you don't have to repay      line 7 the gain from line 15.
any of the credit, unless you sold your home under threat of    • You checked the box on line 3a.
condemnation to someone who is related to you. If the buyer     • You checked the box on line 3f and the event wasn't a sale 
is related to you, the rules explained above for line 3f apply, to a related person (defined earlier).
and you must repay the entire remaining amount of the credit      If neither of the above conditions apply, leave line 7 blank.
you claimed. This is true even if you had a loss on the sale.
                                                                Line 8. Read the following to determine the amount to enter 
Line 3h. If you are filing a joint return for 2024 with the     on line 8.
deceased taxpayer, complete Form 5405 with the deceased 
taxpayer's information only. Check box 3h and file the form       1. If you checked the box on line 3a, enter the smaller of 
with your joint return. The deceased taxpayer need not repay    line 6 or line 7 on line 8.
the credit in 2024 or any later year.                             2. If you checked the box on line 3c or line 3d, enter the 
If you claimed the credit on a joint return with the            amount from line 6 on line 8.
deceased taxpayer, the following rules also apply.                3. If you checked the box on line 3f or line 3g, the 
1. If you didn't dispose of the home and the home didn't        following rules apply.
cease to be your main home, don't complete a separate             a. If you checked the box on line 3f for an event that 
Form 5405 with your information.                                occurred in 2024 and you didn't sell the home to a related 
2. If you disposed of the home or the home ceased to be         person (defined earlier), enter the smaller of line 6 or line 7 
your main home, complete a separate Form 5405 with your         on line 8.
information only. Check the appropriate box on lines 3a           b. If you checked the box on line 3f or line 3g for an event 
through 3g and file the form with your joint return.            that occurred in 2024 and you sold the home to a related 
                                                                person (defined earlier), enter the amount from line 6 on 
Note. If you originally claimed the credit on a joint return,   line 8.
instructions 1 and 2 above apply even if you aren't filing a 
joint return with the deceased taxpayer for 2024.                       Since the 15-year repayment period for homes 
                                                                TIP     purchased in 2008 began with your 2010 tax return 
Part II. Repayment of the Credit                                        and ends with your 2024 tax return, the last possible 
                                                                year of repayment for a home will be for 2024.
If you owned the home and used it as your main home during 
all of 2024, you must continue repaying the credit with your      Repaying more than the minimum amount.         You must 
2024 tax return. Your 2024 payment will be your final           repay at least one-fifteenth ( / ) of the credit with every tax 1 15
payment. You don't have to file Form 5405. Instead, enter the   return during the repayment period until the year the credit is 
repayment on your 2024 Schedule 2 (Form 1040), line 10.         paid in full. You could have chosen to repay more than the 
                                                                minimum amount with any tax return. If you repaid more than 
If you are required to repay the credit because you             the minimum payment with any prior tax return, your final 
disposed of a home you purchased, or that home ceased to        payment for 2024 may be less than the required minimum 
be your main home, you must generally repay the balance of      payment.
the unpaid credit with your 2024 tax return. An exception 
applies for certain members of the uniformed services or          Example. You claimed a $7,500 credit for a home 
Foreign Service or employees of the intelligence community      purchased in 2008. You are required to repay at least $500 of 
(see the instructions for line 2, earlier).                     the credit ($7,500 ÷ 15 years = $500) each year for 15 years 
                                                                starting with your 2010 tax return. However, you chose to 
        If you and your spouse claimed the credit on a joint    repay $700 with your 2010 tax return; you made the required 
TIP     return, each spouse is treated as having been           minimum payment of $500 with your 2011, 2012, 2013, 2014, 
        allowed half of the credit for purposes of repaying the 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022, and 2023 
credit. Each of you must file a separate Form 5405 to notify    tax returns. The minimum repayment with your 2024 tax 
the IRS that you disposed of the home or ceased to use it as    return is $300 (the balance of unpaid installments)—not 
your main home and figure the amount of the repayment.          $500.

Line 4. If you claimed the credit on a joint return but your    Part III. Form 5405 Gain or (Loss) 
spouse died, enter one-half ( / ) of the credit you claimed. 1 2
The remaining half (that is, your spouse's half) doesn't have   Worksheet
to be repaid. If you and your spouse claimed the credit and     Line 12.  Enter the amount from line 6 of Worksheet 2 in Pub. 
the home was later transferred to you by your spouse (or        523.

Instructions for Form 5405 (Rev. 11-2024)                                                                                           3

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