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April 23, 2024
Question

My ex-wife was in the military for 3 years, & we were married. In 2008, we moved back & bought a house, which I still own. Am I exempt from Repayment of the 5405?

  • April 23, 2024
  • 2 replies
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She divorced me, and left me the house, which I still own.  Line 2 in Part 1 of Form 5405, states as a condition as 'I (or my spouse if married) am, or was, a member of the uniformed services....  This condition was met in the past, when we were married, and I believe our repayment was exempt because of her military service?  Or do both of the conditions have to be met, including the second statement, 'I sold the home, or it ceased to be my main home, in connection with US Gov. orders for qualified official extended duty service.

2 replies

April 23, 2024

Both conditions must apply.  If you did not dispose of the house then you would not be exempt and you would not fill out the form. 

 

Also, since you divorced and she transferred the house to you, you do not qualify for the military exemption.  The exemption would be for her if she kept the house but not you. 

 

Line 2. Check the box if you (or your spouse, if married):
Are, or were, a member of the uniformed services or Foreign Service or an employee of the intelligence community (defined below); and

Sold the home or the home ceased to be your main home after 2008 because you (or your spouse, if married) received U.S. Government orders to serve on qualified official extended duty (defined next).
If you (or your spouse, if married) meet both of these conditions, you (and your spouse, if married) don't have to repay the credit.  Instructions form 5405

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Employee
April 23, 2024

Assuming you were each responsible for $250 per year, and assuming she correctly filed a form 5405 when you divorced to report that you kept the house, she has now transferred her responsibility to you and you owe $500 per year until the amount is paid off.  The relief is only allowed if the reason you stopped living in the house was due to military orders.  That is not the case if you still live there.