Taxpayers who claimed the first-time home buyer credit for a home bought in 2008 must generally begin repaying it on the 2010 return. In most cases, the credit must be repaid over a 15-year period. Many of those affected by this requirement received reminder letters from the IRS.
A repayment requirement also applies to a taxpayer who claimed the credit on either their 2008 or 2009 return and then sold the property or stopped using the home as their main home in 2010.
Use Form 5405 to report the repayment. In addition, certain members of the armed forces and some other taxpayers still have time to buy a home and take the credit. See Form 5405 and its instructions for details. If you have any questions regarding the repayment rules do not hesitate to contact us.