Comments on: $7500 First Time Homebuyer Tax Credit

By: ash

ash — Thu, 26 Jan 2012 05:55:19 +0000

Okay, so my husband and I bought and closed on our house december 2008, we recieved the fthbc of 7010.00 which was 10% of our house price. we sold that house december 2009. and bought another house. when we sold the house we filed our taxes and let h & r block know we sold it and we owed the 7010.00 we made a basically that profit on the house. we sent the irs the money. about a month later i get a check in the mail for 7010.00. so i sent it back because I knw we owed it and they sent it back to me, and said I overpaid. after we ammended a few things they said we didn’t owe it. in 2010 we ot our repayment letter for the yearly installment to be filed when we file our 2010 taxes so we had our tax guy not hr block because they messed up stuff, our tax guy filed the form and they took out the 500.00 installment from the refund. havent received anything else from them but im afraid they might say now they want their ? Do you think that I should just keep making the installments each year and hope they dont send anythin out. How do they know when your sell your home anyway? Any advice would be great

By: Tee

Tee — Wed, 25 Jan 2012 05:21:40 +0000

Brian, according to the rules of the First Time Home Buyer program if the home you purchased is not your primary residence for 36 months then you must repay repay the credit. I spoke with the IRS just yesterday and the agent informed me that the entire amount would have been be repaid on my home as I plan on moving out 1 yr shy of my 36 months to take a job in another state. Even if you rent out your home, you still have to repay the money because it is no longer your primary home. Additionally, if you live in California and you took advantage of their first time home buyer program as well, the residence must be your primary residence for 24 months. Hope this helps.

By: no brainer

no brainer — Wed, 18 Jan 2012 01:44:11 +0000

Wow Clinton,what planet are you from. It has nothing to do with not knowing what you signed. It has to do with turning around the very next year and there after, offering this freely. People would have liked to sign on to the free credit if that indeed had of been availabe. There was no choice then, nor any offer in sight of that but the 2008. It does not have anything to do with lack of graditude or stupitity. It’s the principle. If your going to offer someone something don’t turn around and rob them the next year with a better offer for others. If you had a choice which one would you have picked? I wonder.

By: Ed

Ed — Tue, 17 Jan 2012 16:25:17 +0000

Mike,
I have the same senario but I am not going to sell the house… Can’t afford to eat the loss. I am trying to rent it now and I’m paying 2 mortgages. I lived in it he house just under 3 years and had to move for work. i don’t mind paying it back $500/yr I just can’t afford to pay it lump sum. Let me know if you hear anything on this as well.

By: Sonny

Sonny — Sat, 14 Jan 2012 17:39:01 +0000

I know I’m lkate to the thread here–but this comment can nto go by uncommente don:

How rude and unknowledgable you are, Steph. There ARE some ppl that didn’t know it was a loan. Me for instance. Turbotax idetified this loan as a credit–as the name says–a CREDIT, not aloan. I failed to go read up on it–but then how many of us read up on the steps that Turbotaz takes?? Close to zero. Turbotax failed to identify it as a loan–their bad, not mine. I just did ‘normal’, not stupid or dumb. I didn’t sign my name on ANY papers other than my tax return. And yep, I sure did read thru those.

So who is the ‘dumb one’? Looks like you are in your self-centered-I’m-so-much-righter-than-everyone-else way. Big BOO to you.

By: Denise

Denise — Tue, 10 Jan 2012 22:52:49 +0000

Took the $7500 tax credit when we bought it in April 2008. We sold the house at a loss in June 2011, a few months after our divorce. He said he received a letter in the mail during tax season 2010 (in January/February 2011) that showed his half of the loan and how much he owed. I never did receive such a letter. Is there a way to see how much I owe? I have since moved out of state and remarried. I have been worried about this all year, hoping the IRS doesn’t come after me for money that I didn’t even know I owed.

By: Ashley

Ashley — Mon, 09 Jan 2012 23:10:17 +0000

hi,
I took the $7,500 tax credit when we bought our first home. We began repayment last year. In May 2011 we had to move out of state and decided to rent out our house.
Do we owe the rest of the $7000 this tax year? Or does moving out of state to keep a job fall under the “special rules for involuntary conversions” the IRS lists on its website?

By: JP

JP — Sat, 10 Dec 2011 20:19:21 +0000

Brian,

You may have to repay. There is no time limit that I’ve read about.

Here is the formula:
Purchase Price+Credit Received-2010 Credit repayment = Basis

Selling Price(even if foreclosed) – Basis = Immediate Repayment

Obviously if that number equals 0 or is negative there is no repayment.

You actually will have wanted at least a loss of $7000 to qualify for no repayment(assuming you paid 500 last year).

This is taken directly from the Repayment Credit form from the IRS, and according to HR Block tax software.

Why dump your CPA when he is correct? There is a $1500 dollar penalty + sizable interest to pay if you try to say you had 0 profit when you actually had $2500. Not his fault, but you are better off hearing the truth rather than paying the penalty + interest + the amount owed.

By: JP

JP — Sat, 10 Dec 2011 20:11:07 +0000

Pat,

You may have to repay. It does not transfer to the other home to my knowledge.

Here is the formula:
Purchase Price+Credit Received = Basis

Selling Price – Basis = Immediate Repayment

Obviously if that number equals 0 or is negative there is no repayment.

You actually will have wanted at least a loss of 7500 to qualify for no repayment.

This is taken directly from the Repayment Credit form from the IRS, and according to HR Block tax software.

By: frustated

frustated — Fri, 18 Nov 2011 01:43:24 +0000

I bought a house in December 2008 and got the $7500 interest free loan. Then in July 2011 I moved to another state because I couldn’t find a job in my state. On my 2010 taxes, I made my first installment of $500.

Since then, the IRS has sent me a letter that they want me to pay back the remaining money plus $1500 in penalties and $970 in interest.

It clearly states on the IRS website “If you stop using the home as your main home, all remaining annual installments become due on the return for the year that happens. This includes situations where the main home becomes a vacation home or is converted to business or rental property. ”

how can they charge me penalty and interest when I am planning to pay back the remaining $7,000 on my 2011 taxes??????

By: Carrie

Carrie — Fri, 28 Oct 2011 01:29:26 +0000

Bgezon, did you ever find an answer to this? I have also rented my house, at a loss because I could no longer afford the mortgage. I expected to pay $500/year, but definitely can’t swing the lump sum.

By: Scott

Scott — Mon, 17 Oct 2011 21:37:12 +0000

Stephanie,
Hopefully, your comment is based upon negative reactions from recipients in 09,10. I too signed up for the fthbc in 2008 KNOWING that I had to pay it back over the next 15years. What I, and many others are upset about is that if we had waited until 09(3 months for me) then we would not have to pay it back. Why should acting early on a limited time offer from the government require me to pay back several thousands of dollars but if you waited……….FREE MONEY!
Our congress is trite…..has been for years.

By: Debra

Debra — Mon, 26 Sep 2011 12:08:00 +0000

Hi Lidiette – did you ever get an answer to these questions? I have the same questions & have read all the posts, don’t see an answer

By: Anonymous

Anonymous — Thu, 15 Sep 2011 14:37:33 +0000

Hey we got our home in 2009, my husband lost his job so wr are faced with having to see….. Is there any grace on paying
Back the $8 grand if there is job loss involved?

By: stand

stand — Tue, 30 Aug 2011 12:35:30 +0000

For all those people who believe that the credit is going to get 6 to 8 weeks forget it
It took us exactly one year after sending copies of practically all the closing papers on our house
and after having called many times and sent an endless stacks of paper they just sent us a letter telling us that they had not had time to review our case we reach a point of frustration
Finally last week we received another letter that approved the credit but that will take 6 to 8 weeks
So get ready to wait with patience
good luck