Question about the $7,500 First-time Home Buyer Tax Credit
I am now in the process of selling my home and have the understanding that I will definitely have to pay it back. However, I will make sure the house doesn't sell until January so I don't have to worry about the sale until I pay my taxes in 2011.
My question is this:
Will I have to pay the $8000 back in full or can I still make the $500 payments each tax season until it is paid off?
Found this... wonder how accurate it is:
Quote :2008 Homebuyer tax credit: You must start paying back the credit two years after the year you bought the house. You pay back the credit over a 15-year period as an additional tax on your tax return. If you claim a $7500 credit, for example, you must pay back about $500 per year. Note: The tax credit is basically a 15-year interest-free loan from the government.
If you stop living in the house as your primary residence, or if you sell the house before the 15-year repayment period is over, you must pay back the balance of the tax credit in full. In special situations, you do not have to pay back the full amount (for example if you do not make enough profit from the sale of the house to pay back the credit, or if the taxpayer dies).