If the first-time homebuyer credit was claimed for a home that was purchased in 2008, repayment of the loan generally began with the 2010 tax return. In addition, the balance of any unpaid credit must be repaid on the tax return in the year the home was sold or stopped being the main home.
If repayment of the remaining credit is required, Part III of Form 5405 must be completed.
To enter a repayment of the first-time homebuyer credit for a home still used as the main home, from the Main Menu of the Tax Return (Form 1040), select:
- Other Taxes
- First-Time Homebuyer Credit Repayment
- 2008 First-Time Homebuyer Credit Repayment – For a MFJ return, if the taxpayer and spouse are living at the end of the tax year, enter $250 for each; if the spouse died, enter $250 for the taxpayer only. For all other filing types, enter $500.
If there were changes in the main home, such as foreclosure, sale, catastrophic loss, or death of the taxpayer, you would need to fill out Part III in addition to the repayment.
- Other Taxes Menu
- First-Time Homebuyer Credit Repayment
- Complete Form 5405
- Complete Parts I, II, and III. You will need to know certain details about the home’s disposition as well as the total of the credit repaid in prior years.
NOTE: This is a guide on entering First Time Homebuyer Credit into the TaxSlayer Pro program. This is not intended as tax advice.
Additional Resources:
Instructions for Form 5405 – First-Time Homebuyers Credit