- 1). Fill out Part I of Form 5405. This section is for general information, such as the address of your new home and the purchase date.
- 2). Fill out the top of Part II of Tax Form 5405. This section is for calculating your credit. The credit will be $8,000 unless the purchase price of your new home was less than $80,000, in which case the credit is 10 percent of the purchase price.
- 3). Include your modified adjusted gross income for 2009 as instructed at the bottom of Part II of Form 5405. Your MAGI was the number you filled in on line 38 of Form 1040, the primary form for filing your taxes, plus any income you earned in Puerto Rico or a foreign country. If your MAGI was more than $125,000, your tax credit will be reduced and you will calculate the reduction by following the instructions in Part II of Form 5405. If your MAGI was more than $145,000, you cannot claim the credit.
- 4). Staple a copy of the home purchase settlement statement to Form 5405. The statement must show all parties' names and signatures, the contract sales price, the property address and date of purchase. Most often the settlement statement is Form HUD-1, which you should have received from the closing agent. If you purchased a mobile home and do not have a settlement statement, include a copy of the retail contract that contains the relevant names, address, purchase price and date of purchase. If you bought a newly constructed home and do not have a settlement statement, include a copy of the certificate of occupancy with the relevant information.
- 5). Fill in the amount of the credit on Form 1040, the primary form for filing your taxes. On the 2009 form, line 67 in the "Payments" section is the spot for including the credit amount. This line also instructs you to attach Form 5405 to Form 1040.
- 6). Staple copies of Form 1098, Mortgage Interest Statement, homeowner's insurance records or property tax records to Form 5405. This step applies only if you are claiming the tax credit for being a long-time resident who has purchased a new home. The documents verify that you lived in your last home for at least five consecutive years. If you are a first-time home buyer, skip this step.
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