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Department of the Treasury
Internal Revenue Service
Instructions for Form 5405

(Rev. November 2023)
Repayment of the First-Time Homebuyer Credit

Section references are to the Internal Revenue Code unless credit in excess of the gain doesn't have to be repaid. (See
otherwise noted. Related Persons , later.)
Transfer to spouse or ex-spouse. If the home was
Future Developments transferred to a spouse (or ex-spouse as part of a divorce
settlement), the spouse who received the home is
For the latest information about developments related to responsible for repaying the credit (regardless of whether he
Form 5405 and its instructions, such as legislation enacted or she was the purchaser) if none of the other exceptions
after they were published, go to IRS.gov/Form5405. apply.
Person who claimed the credit dies. If a person who
Reminder claimed the credit dies, repayment of the remaining balance
Repayment requirement. The repayment requirement has of the credit isn't required unless the credit was claimed on a
expired for homes purchased after 2008. The repayment joint return. If the credit was claimed on a joint return, then the
requirement continues to apply to homes purchased in 2008. surviving spouse is required to continue repaying his or her
half of the credit (regardless of whether he or she was the
purchaser) if none of the other exceptions apply.
General Instructions
Related Persons
Purpose of Form Related persons include the following.
Use Form 5405 to do the following. 1. Your spouse, ancestors (parents, grandparents, etc.),
• Notify the IRS that the home you purchased in 2008 and or lineal descendants (children, grandchildren, etc.).
for which you claimed the credit was disposed of or ceased to 2. A corporation in which you directly or indirectly own
be your main home in 2023. Complete Part I and, if more than 50% in value of the outstanding stock of the
applicable, Parts II and III. corporation.
• Figure the amount of the credit you must repay with your
2023 tax return. Complete Part II and, if applicable, Part III. 3. A partnership in which you directly or indirectly own
more than 50% of the capital interest or profits interest.
Who Must File For more information about related persons, see the
You must file Form 5405 with your 2023 tax return if you discussion under Nondeductible Loss in chapter 2 of Pub.
purchased your home in 2008 and you meet either of the 544, Sales and Other Dispositions of Assets. When
following conditions. determining whether you acquired your main home from a
1. You disposed of it in 2023. related person, family members in that discussion include
2. You ceased using it as your main home in 2023. only the people mentioned in (1) above.

But see Exceptions, later.
Specific Instructions
In all other cases, you aren't required to file Form 5405.
Instead, enter the repayment on 2023 Schedule 2 (Form Part I. Disposition or Change in Use
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
you claimed for a home you purchased in 2008, and you Was Claimed
owned and used the home as your main home during all of Complete Part I if you claimed the first-time homebuyer credit
2023. for a home purchased in 2008 and either you disposed of the
Credit claimed on a joint return. If you and your spouse home or it ceased to be your main home in 2023. This
claimed the credit on a joint return, each spouse is treated as includes situations where:
having been allowed half of the credit for purposes of • You sold the home (including through foreclosure);
repaying the credit. Each spouse who meets either condition • You converted the entire home to business or rental
1 or 2 above must file a separate Form 5405. property;
• You abandoned the home (except in connection with a sale
Exceptions or foreclosure);
The following are exceptions to the repayment rule. • The home was destroyed, condemned, or disposed of
under threat of condemnation; or
Condemnation or threat of condemnation. If the home is • The taxpayer who claimed the credit died in 2023.
destroyed, or you sell the home through condemnation or
under threat of condemnation to someone who isn't related to Sales (including through foreclosure). In the case of a
you and you don't acquire a new home within the 2-year sale (including through foreclosure) of your main home, you
period, the repayment with your return for the year in which must repay the credit with the tax return for the tax year in
the 2-year period ends is limited to the gain on the disposition which the sale is completed. In general, this will occur when
as determined in Part III of Form 5405. The amount of the the purchaser (or lender) obtains title to your home.

Aug 1, 2023 Cat. No. 54378F

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Name and social security number. Enter your name and • Any of the elements of the Department of Homeland
social security number. Each spouse who meets condition 1 Security concerned with the analyses of foreign intelligence
or 2 earlier under Who Must File must file a separate Form information.
5405. Each spouse must enter only his or her name and Lines 3a, 3b, and 3c. If you sold your home to someone
social security number on his or her separate Form 5405. who isn't related to you, complete Part III to figure the gain or
This is true whether a joint return or separate returns are filed. (loss) on the sale. (The person isn't related to you if he or she
Line 1. If your home was destroyed or condemned, or you doesn't meet the definition under Related Persons, earlier.)
disposed of the home under threat of condemnation, enter The repayment is limited to the amount of gain. The amount
the date it was destroyed, condemned, or disposed of under of the credit in excess of the gain doesn't have to be repaid.
threat of condemnation (or the date it ceased to be your main Line 3d. See the Tip below for information about converting
home, whichever is earlier). your entire home to business or rental use.
Line 2. Check the box if you (or your spouse, if married): Don't check this box if you converted only a part of the
• Are, or were, a member of the uniformed services or home to rental or business use and you continue to use the
Foreign Service or an employee of the intelligence other part as your main home. Don't file Form 5405 for this
community (defined below); and conversion. Enter your annual repayment on your 2023
• Sold the home or the home ceased to be your main home Schedule 2 (Form 1040), line 10.
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 2023, 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 2023. You are required to repay at least one-fifteenth ( / ) of 1 15
repay the credit. the credit with your 2023 return. You don't have to file Form
Qualified official extended duty. You are on qualified 5405. Instead, enter the repayment on your 2023 Schedule 2
official extended duty while: (Form 1040), line 10.
• Serving at a duty station that is at least 50 miles from your
main home, or Example 2. You claimed the credit for a home you
• Living in U.S. Government quarters under U.S. purchased in 2008. In January 2023, you moved out of the
Government orders. home and converted it to rental property. You must check the
You are on extended duty when you are called or ordered to box on line 3d and complete Part II. In this case, you must
active duty for a period of more than 90 days or for an repay the balance of the credit with your 2023 tax return.
indefinite period. When you convert your entire home to business or
Uniformed services. The uniformed services are: TIP rental use, you no longer use any part of it as your
• The Armed Forces (the Army, Navy, Air Force, Marine main home. The home is used for business if you use
Corps, and Coast Guard), it for an activity that you carry on to make a profit. The facts
• The commissioned corps of the National Oceanic and and circumstances of each case determine whether or not an
Atmospheric Administration, and activity is a business.
• The commissioned corps of the Public Health Service.
Foreign Service member. For purposes of the credit, you Line 3e. Check the box on line 3e if you meet either of the
are a member of the Foreign Service if you are any of the following conditions.
following. • You transferred the home to your spouse.
• A Chief of mission. • You and your spouse divorced and you transferred the
• An Ambassador at large. home to your ex-spouse as part of the divorce settlement.
• A member of the Senior Foreign Service. Include the full name of your ex-spouse in the space
• A Foreign Service officer. provided.
• Part of the Foreign Service personnel. The spouse who received the home is responsible for
Employee of the intelligence community. For purposes repaying the credit under the rules provided in these
of the credit, you are an employee of the intelligence instructions.
community if you are an employee of any of the following.
Lines 3f and 3g—Home destroyed or sold through con-
• The Office of the Director of National Intelligence.
demnation or under threat of condemnation. If your
• The Central Intelligence Agency.
home was destroyed or you sold your home through
• The National Security Agency.
condemnation or under threat of condemnation to a person
• The Defense Intelligence Agency.
who isn't related to you, the amount of the credit you have to
• The National Geospatial-Intelligence Agency.
repay (if any) is limited to the gain on the disposition.
• The National Reconnaissance Office and any other office
Complete Part III to determine whether you have a gain.
within the Department of Defense for the collection of
Check the box on line 3f if you have a gain. If you don't have
specialized national intelligence through reconnaissance
a gain, you don't have to repay any of the credit. Check
programs.
the box on line 3g if you don't have a gain. Then read the
• Any of the intelligence elements of the Army, the Navy, the
instructions below for line 3f or line 3g, whichever applies.
Air Force, the Marine Corps, the Federal Bureau of
Investigation, the Department of the Treasury, the Line 3f. If you acquired or plan to acquire a new home
Department of Energy, and the Coast Guard. within 2 years of the event, you must generally continue to
• The Bureau of Intelligence and Research of the repay the credit over a 15-year period that began with your
Department of State. 2010 tax return. Complete Part II to figure your installment
payment for 2023 if the event wasn't a sale to a related
person.

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If you don't acquire a new home within the 2-year period, If you and your spouse claimed the credit on a joint
the following rules generally apply. TIP return, each spouse is treated as having been
• If the event occurred in 2021, you must generally repay the allowed half of the credit for purposes of repaying the
balance of the credit in full with your 2023 return. You don't credit. Each of you must file a separate Form 5405 to notify
have to file Form 5405. Instead, enter the repayment on your the IRS that you disposed of the home or ceased to use it as
2023 Schedule 2 (Form 1040), line 10. your main home and figure the amount of the repayment.
• If the event occurred after 2021, your annual repayment
requirement continues until the year in which the 2-year Line 4. If you claimed the credit on a joint return but your
period ends. On the tax return for the year in which the 2-year spouse died, enter one-half ( / ) of the credit you claimed. 1 2
period ends, you must include all remaining installments as The remaining half (that is, your spouse's half) doesn't have
an increase in tax. Note that since the 15-year repayment to be repaid. If you and your spouse claimed the credit and
period for homes purchased in 2008 began with your 2010 the home was later transferred to you by your spouse (or
tax return and ends with your 2024 tax return, the last ex-spouse as part of a divorce settlement), enter the total
possible year of repayment will be for 2024. Therefore, if the credit claimed by both you and your spouse (or ex-spouse).
2-year period ends after 2024, you will not have any Enter the credit you claimed for a home that was
remaining installments due as your balance will be fully paid destroyed or that you sold through condemnation or under
off with your 2024 tax return. threat of condemnation.
Line 3g. If you don't have a gain, you don't have to repay
any of the credit, unless you sold your home under threat of Line 6. If you checked the box on line 3f and the event
condemnation to someone who is related to you. If the buyer wasn't a sale to a related person (defined earlier), go to
is related to you, the rules explained above for line 3f apply, line 7.
except that you must repay the entire amount of the credit If you checked the box on line 3f or line 3g and the event
you claimed if you didn't acquire a new home within the was a sale to a related person (defined earlier), skip line 7
2-year period. This is true even if you had a loss on the sale. and go to line 8.
Line 3h. If you are filing a joint return for 2023 with the Line 7. If any of the following conditions apply, enter on
deceased taxpayer, complete Form 5405 with the deceased line 7 the gain from line 15.
taxpayer's information only. Check box 3h and file the form • You checked the box on line 3a.
with your joint return. The deceased taxpayer need not repay • You checked the box on line 3f and the event wasn't a sale
the credit in 2023 or any later year. to a related person (defined earlier).
If you claimed the credit on a joint return with the If neither of the above conditions apply, leave line 7 blank.
deceased taxpayer, the following rules also apply. Line 8. Read the following to determine the amount to enter
1. If you didn't dispose of the home and the home didn't on line 8.
cease to be your main home, don't complete a separate 1. If you checked the box on line 3a, enter the smaller of
Form 5405 with your information. line 6 or line 7 on line 8.
2. If you disposed of the home or the home ceased to be 2. If you checked the box on line 3c or line 3d, enter the
your main home, complete a separate Form 5405 with your amount from line 6 on line 8.
information only. Check the appropriate box on lines 3a
through 3g and file the form with your joint return. 3. If you checked the box on line 3f or line 3g, the
following rules apply.
Note. If you originally claimed the credit on a joint return, a. If you checked the box on line 3f for an event that
instructions 1 and 2 above apply even if you aren't filing a occurred in 2023 and you didn't sell the home to a related
joint return with the deceased taxpayer for 2023. person (defined earlier), your repayment is limited to the gain.
If line 7 is less than line 6, divide line 7 by 2.0. Otherwise,
Part II. Repayment of the Credit divide line 4 by 15.0. This is the minimum amount you must
If you owned the home and used it as your main home during repay with your 2023 return. Enter this amount (or a larger
all of 2023, you must continue repaying the credit with your amount if you choose) on line 8. But see Repaying more than
2023 tax return. You don't have to file Form 5405. Instead, the minimum amount below.
enter the repayment on your 2023 Schedule 2 (Form 1040), b. If you checked the box on line 3f or line 3g for an event
line 10. that occurred in 2023 and you sold the home to a related
If you are required to repay the credit because you person (defined earlier), divide line 4 by 15.0. This is the
disposed of a home you purchased, or that home ceased to minimum amount you must repay with your 2023 return.
be your main home, you must generally repay the balance of Enter this amount (or a larger amount if you choose) on
the unpaid credit with your 2023 tax return. An exception line 8. But see Repaying more than the minimum amount
applies if your home was destroyed or condemned, or you below.
disposed of the home under threat of condemnation, and you c. If you don't repay your credit earlier, you continue to
didn't acquire a new main home within 2 years of the event. repay the amount described above with your 2024 tax return.
(See the instructions for lines and 3f 3g, earlier.) Another But see (d) next for an exception.
exception applies for certain members of the uniformed d. If you don't acquire a new main home within 2 years of
services or Foreign Service or employees of the intelligence the event, (c) above doesn't apply. Instead, you must include
community (see the instructions for line 2, earlier). any remaining installments as an increase in tax on the tax
return for the year in which the 2-year period ends.

Instructions for Form 5405 (Rev. 11-2023) -3-

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    Since the 15-year repayment period for homes                        the credit ($7,500 ÷ 15 years = $500) each year for 15 years 
TIP purchased in 2008 began with your 2010 tax return                   starting with your 2010 tax return. However, you chose to 
    and ends with your 2024 tax return, the last possible               repay $700 with your 2010 tax return; you made the required 
year of repayment for a home will be for 2024. Therefore, your          minimum payment of $500 with your 2011, 2012, 2013, 2014, 
final payment for the situations described in both (c) and (d)          2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022, and 2023 
will be for 2024.                                                       tax returns. The minimum repayment with your 2024 tax 
                                                                        return is $300 (the balance of unpaid installments)—not 
Repaying more than the minimum amount. You must                         $500.
repay at least one-fifteenth ( / ) of the credit with every tax 1 15
return during the repayment period until the year the credit is         Part III. Form 5405 Gain or (Loss) 
paid in full. You can choose to repay more than the minimum 
amount with any tax return. Your final payment may be less              Worksheet
than the required minimum amount.
                                                                        Line 12. Enter the amount from line 6 of Worksheet 2 in Pub. 
Example. You claimed a $7,500 credit for a home                         523.
purchased in 2008. You are required to repay at least $500 of 

                                                                    -4-          Instructions for Form 5405 (Rev. 11-2023)

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