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Me and hubby purchased a house in June of 2009. Hubby is in AirForce and according to him there is a high probability of him being transferred elsewhere in the country in Dec of 2011. At that point this house would be our primary residence for 2.5 years. We don't want to sell the house, we gonna rent it. So the question is, are we still going to be responsible for repayment of $8000 first time homebuyer's tax credit if he is on the assignment of US government? Is there an exception to this??? If so please provide your sourse.
Exceptions ... there doesn't appear to be one, but you may want to ask a tax advisor on this one.
Quote:
Repaying the Credit
Q. When must I pay back the credit for the home I purchased in 2009?
A. Generally, there is no requirement to pay back the credit for a principal residence purchased in 2009 or early 2010. The obligation to repay the credit arises only if the home ceases to be your principal residence within 36 months from the date of purchase. The full amount of the credit received becomes due on the return for the year the home ceased being your principal residence.
Q. If I claim the first-time homebuyer credit for a purchase in 2009 or early 2010 and stop using the property as my principal residence before the 36 month period expires after I purchase, how is the credit repaid and how long would I have to repay it?
A. If, within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full amount of the credit is due at the time the income tax return for the year the home ceased to be your principal residence is due. The full amount of the credit is reflected as additional tax on that year's tax return. Form 5405 and its instructions will be revised for tax year 2009 to include information about repayment of the credit.
Q. When does my home stop being my main home?
A. Here are examples of when your home stops being your main home:
- You sell the home.
- You transfer the home to a spouse or former spouse in a divorce settlement.
- You convert the entire home to a rental or business property.
- You converted the home to a vacation or second home.
- You no longer live in the home for the greater number of nights in a year.
- Your home is destroyed or condemned.
- You lose your home in foreclosure.
- You die. (1/6/11)
Q. When do I have to repay the credit?
A. You repay the full or part of the credit as an additional tax on your tax return when the home stops being your main home during the 36-month period following the date you purchased your home.
You must repay the full credit when:
- You sold your main home to a related person or entity
- Your home is destroyed, condemned or disposed of under threat of condemnation and you do not purchase or rebuild a replacement home within two years.
- You converted the entire home to a rental or business property.
- You converted the home to a vacation or second home.
- You no longer live in the home for the greater number of nights in a year.
You may have to repay the full or a part of the credit when:
- You sold your main home to a non-related person or entity. You repay the amount of the credit up to the amount of your capital gain. Note: when calculating gain or loss on your main home if you received the first-time homebuyer credit, you reduce your basis by the amount of the credit. See Publication 551, Basis of Assets, for more information.
- You lost your home in a foreclosure.You must repay the credit only up to the amount of gain. (1/6/11)
There were additional benefits for military included in the November 2009 homebuyer credit extension. It includes exemption for credit repayment due to government required relocation at least 50 miles from the home. Check with a tax professional to verify and get specifics for your situation.
Read the publication. Sounds like the OP situation DOES qualify for non-repayment. The PCS orders would suffice in demonstrating the reason for selling, renting or losing primary residence status on the home is due to military orders that qualify under extended active duty (more than 90s to indefinite..which PCS and even some TDY orders qualify for). OP, you're good to go.
This is exactly the same situation I'm in. Given PCS order across the country and will sell the home I've lived in 2 years. The publication specifically states the exceptions apply to homes purchased after 2008, so the poster who suggested the exceptions did not apply to the period where the 8K credit was available (i.e. homes bought in 2009 and 2010) was incorrect in his/her assertion. These exceptions do cover all credits after 2008.
You lost your home in a foreclosure.You must repay the credit only up to the amount of gain. (1/6/11)
So how does this work. I had no gain on the loss of the home due to foreclosure. NO GAIN....
I gave them the information and they still sent me a bill for $9,872.39 for 2008!
I filed my return and stated that I was insolvent! I filed the proper paperwork on the home w/tx returns.
Does anyone know how to respond to this!
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