1040-US: First-time homebuyer credit claimed by taxpayer and spouse for the same home while unmarried; the couple married and the home is still the principal residence

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Question

Both the taxpayer and spouse claimed a first-time homebuyer credit for the same home in a prior year while unmarried to each other. The couple married; the home remains the principal residence. How do I enter this in UltraTax CS?

Answer

Example: Jim and Connie, while unmarried to each other, purchased a home and claimed a first-time homebuyer credit in 2008 on their separate tax return. In 2017, they married each other. Both are required to file separate Form 5405, Page 2, to pay installments.

Data Entry for Jim: On one unit of Screen 5405, enter data for her home in fields in the General Information section: Address, City, state, zip code, Date acquired, and Purchase price. In the Form 5405 - Prior Year Credit Information section, enter data in fields First-time homebuyer credit taken and Tax year first-time homebuyer credit taken. Because Jim did not dispose of her home, no further data entry is needed.

Data Entry for Connie: On an additional unit of Screen 5405, enter data for her home in the Address and City, State, zip code fields, and enter code S in the Owner of the home in which the first-time homebuyer credit was taken field. Selecting the S will identify Connie on her separate the Form 5405, Page 2. Enter data in the First-time homebuyer credit taken and Tax year first-time homebuyer credit fields. Because Connie did not dispose of her home, no further data entry is needed.

UltraTax CS will complete 2 units of Form 5405. UltraTax CS enters the social security number on the Form 5405 that is associated with the taxpayer and spouse. In addition, because they did not sell her home, UltraTax CS completes a First-Time Homebuyer Credit Worksheet with the 15-year repayment schedule for both the taxpayer and spouse.

Related topic: First-time homebuyer credit FAQs (1040)

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