Information On Filing Your Tax Credit

This is very informative from Kiplinger’s Letter.  “The IRS is beefing up oversight of the home buyer credit to stop bogus claims.  To get the credit, filers must attach more documentation to Form 5405, which has been revised by the Service.  A signed copy of the settlement statement must now accompany the form.  Mobile home buyers who don’t have the document should include the signed sales contract.  Likewise, filers who have a residence built for them should instead attach a copy of the certificate of occupancy to their 5405.  The service also wants information from buyers who are claiming the $6,500 credit.  They should enclose Form 1098 or records of property taxes or insurance coverage to document that they owned the home for five consecutive years out of the last eight.

Filers taking the credit on their 2009 returns must use the new 5405, which is dated Dec. 2009.  If you are claiming the credit for a 2009 home purchase on an amended 2008 return you must use the revised 5405 if the home was bought after Nov. 6, 2009.  Use the 2008 version for home purchased before Nov. 7, 2009

Returns claiming the credit CANNOT be e-filed because of the attachment rules.  And the IRS won’t start processing 2009 returns with 5405s until mid-Feb., when it expects to have its computers reprogrammed to handle the rule changes.  Factoring in the extra processing time needed for paper returns, the first refunds for returns claiming the home buyer credit will not be issued until late March.”