Fill out Form 5405 (Repayment of the First-Time Homebuyer Credit) online
Form 5405 is used to calculate and report repayment of the first-time homebuyer credit claimed on a prior year return. Taxpayers who received the credit for a home purchased in 2008 are generally required to repay it in equal installments over 15 years, while those who sold or stopped using the home as their main residence must repay the remaining balance.
How to fill out Form 5405 (Repayment of the First-Time Homebuyer Credit)
Determine your repayment situation
Identify whether you are making a regular annual installment payment (for 2008 purchases), reporting a disposition of the home, or claiming an exception to repayment. Each situation requires completing different parts of the form.
Calculate the repayment amount
For regular installments, divide the original credit by 15. For dispositions, calculate the gain on the sale and determine whether the full remaining credit balance must be repaid or if the repayment is limited to the gain.
Report any exceptions
If you qualify for an exception to repayment (such as transfer to a spouse in divorce, death of the taxpayer, or involuntary conversion), check the applicable box and provide the required details.
Enter the repayment on your tax return
Transfer the repayment amount from Form 5405 to Schedule 2 of your Form 1040. This amount is added to your total tax liability for the year.
About Form 5405 (Repayment of the First-Time Homebuyer Credit)
Who needs this form
Taxpayers who claimed the first-time homebuyer credit (for homes purchased in 2008-2010) and are required to repay it. This includes those making the required annual installment payments for the 2008 credit and anyone who disposed of the home, converted it to a rental or business property, or otherwise stopped using it as their main residence.
Where to submit
Attach Form 5405 to your Form 1040 or 1040-SR when filing your annual federal income tax return. The repayment amount is included as an additional tax on Schedule 2.
Source and content freshness
- Reviewed: 2026-02-24
- Filing deadlines may shift for weekends and holidays. Verify due dates with official instructions.
Common mistakes to avoid
- Forgetting to file the form and make the annual repayment installment, which triggers the full remaining balance becoming due
- Not reporting the disposition of the home, which accelerates repayment of the remaining credit balance
- Confusing the 2008 credit (which must be repaid) with the 2009-2010 credit (which generally does not require repayment unless the home is sold within 36 months)
- Not claiming an exception to repayment when the home was transferred to a spouse as part of a divorce settlement
Frequently asked questions
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Do I have to repay the first-time homebuyer credit if I sell my home?
It depends on when you purchased the home and your gain on the sale. For the 2008 credit, selling the home accelerates repayment of the remaining balance, but the repayment is limited to the gain on the sale (if the gain is less than the remaining credit balance). For the 2009-2010 credit, no repayment is required unless you sold the home within 36 months of purchase. Certain exceptions apply, such as transfers due to divorce or death.
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