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
SUNIL SETHI REAL ESTATE
CA DRE#: 01173766