Most home buyers who claimed the federal tax credit of up to $7,500 for buying their first home in 2008 are required to start repaying the credit in 15 annual installments, beginning with their 2010 tax returns.
The credit—some form of which was offered for qualified home purchases in 2008, 2009, and 2010—has different repayment rules depending on when and under what circumstances the home was purchased. As tax season approaches, this may cause confusion among home buyers who received the tax credit.
The IRS is sending a letter to taxpayers who claimed the credit that explains if, when, and how the buyer has to repay the credit. There are different IRS letters for different situations, including a purchase of a home in 2008, 2009, or 2010; a sale of a main home; or a change in the use of the main home.
The IRS website at www.irs.gov contains detailed information about repayment requirements for the federal home buyer tax credit. For information about the tax benefits of homeownership, go to NAHB’s website www.SaveMyMortgageInterestDeduction.com.
Reprinted from C.A.R. Newlines.
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