While it’s of doubtful use economically, the first-time homebuyer credit is definitely worth claiming when you qualify. The IRS struggles to process claims for the $8,000 refundable credit (you get it even if your tax is zero) because it is a fraud magnet. If you don’t want to wait many months for your credit, make sure you give the IRS everything it wants with the return.
You can’t e-file a claim for the credit. Your return with Form 5405 needs to be filed on paper.
- You have to file a 1040. You can’t use either short-form 1040, and you can’t file the Form 5405 by itself.
You have to attach a signed settlement statement. The IRS says:
For most homebuyers, this will be a properly executed Form HUD-1, Settlement Statement (U.S. Department of Housing and Urban Development) that includes:
* Names and signatures (if available) of all parties involved,
* Property address,
* Purchase price, and
* Date of purchase.
If you purchased a mobile home and do not have a settlement statement, you should attach a copy of your executed retail sales contract showing all parties’ names and signatures, the property address, the purchase price and the date of purchase.
If you are claiming the credit for a newly constructed home and you do not have an executed settlement statement, you should attach a copy of your certificate of occupancy showing the name of the taxpayer, the property address, and the date of the certificate.
Of course, you need to make sure you qualify.
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Image credit: Image by Boris T. Johnson under Creative Commons license.