A new form, Form 5405, First-Time Homebuyer Credit and Repayment of the Credit,and the related instructions., was released by The Internal Revenue Service outlining what eligible homebuyers need to claim the first-time homebuyer credit this tax season.
Processing those returns is about to begin. Eligible homebuyers can now start to file their 2009 tax returns.
Eligible homebuyers must include with their 2009 tax returns one of the following documents in order to receive the credit:
- A copy of the settlement statement showing all parties' names and signatures, property address, sales price, and date of purchase. Normally, this is the properly executed Form HUD-1, Settlement Statement.
- For mobile home purchasers who are unable to get a settlement statement, a copy of the executed retail sales contract showing all parties' names and signatures, property address, purchase price and date of purchase.
- For a newly constructed home where a settlement statement is not available, a copy of the certificate of occupancy showing the owner's name, property address and date of the certificate.
The new law allows a long-time resident of the same main home to claim the homebuyer credit if they purchase a new principal residence.
Qualifications include: having lived in your old homes for a 5-consecutive-year period during the 8-year period ending on the purchase date of the new home.
To avoid refund delays in processing your return, attach documentation covering the five-consecutive-year period:
- Form 1098, Mortgage Interest Statement, or substitute mortgage interest statements,
- Property tax records or
- Homeowner's insurance records.