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Old 10-12-2009, 10:30 AM
 
8 posts, read 14,033 times
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Hi,

am currently int he process of buying a home in sugarland. i do qualify for the fort bend mortgage credit certificate. i dont seem to quite understand the merits of it and if its for me. theres quite a bit of caveats.. recapture tax etc.

could somebody kindly explain just how this tax credit works.

"The MCC will reduce the amount of federal income taxes otherwise due to the federal government from the homebuyer; however, the IRS will not pay out more than should have been paid in. Therefore, the benefit to the home owner in any one year cannot exceed the amount of federal taxes owed for that year, after other credits and deductions have been taken into account. Tax credit amounts not used in a given year may be carried forward into the next three subsequent years or until used, whichever comes first."

does that mean that for example, if i am due 2,000 from the tax credit, if my tax return for the year after other deductions was 1000, i do not get a return of 1000? or do i get cut a check for the balamnce of 1,000?

some insight with regards to recapture tax would also be very helpful.

the entire home purchase is based on one persons income as one of us has been unemployed for some time. but there are prospects next year.. would that then constitute once employment is found, the increase of 5% in income and then liable for recapture tax?

does the "significant increase" in income constitute the household income or only of the applicant?

all replies and any help provided helping me understand/make sense of/decide if its for me will be very appreciated.

regards,
asmd.
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