First Time or Repeat Home Buyer Tax Credit

The IRS just released a revised Form 5405 to reflect the changes to the tax credit made in the extension enacted in November 2009. The release reminds taxpayers that all tax returns claiming the tax credit must be filed manually (i.e., they cannot utilize the IRS E-File automatic system). The revised form includes a section for those repeat buyers who are eligible to claim the $6500 tax credit. The HUD-1 (the settlement statement sheet you get at a closing) must be filed with all returns claiming the credit (both the $8000 and $6500 credits). Individuals who claim the repeat buyer credit must also provide evidence that they have owned and used the prior residence for 5 consecutive years. The instructions indicate that property tax or homeowners insurance records are sufficient for this purpose.  Here is a link to the IRS website for ALL the FUN Details!!!!

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