Did you purchase a Kansas City home in 2008 or know of someone who bought a home in 2008?
If the $7500 first time home buyer tax credit was used to purchase the home…did you know it is time to start paying back the tax credit?
For many people who purchased a home for the first time in 2008, it’s payback time.
It sounded like a great deal at the time: become a first-time home buyer and pocket up to $7,500 in a tax credit, right? But if you bought that house in 2008 and received the tax credit, you’re required to start paying it back – now. I suggested the USDA loan at the time, but I know many home buyers still eyed what they thought was free money. There were even rumors that the tax credit would be forgiven.
The tax credit in 2008 was actually an interest-free loan provided by the government to stimulate a near-dead housing market. Unlike the home buyer credits of ‘09 and ‘10, this one must be paid back over 15 years beginning with this year’s tax return.
For someone who got $7,500, that’s $500 a year.
The 2008 credit was available to qualified home buyers who purchased after April 8, 2008, through the end of that year. The IRS have started sending letters reminding folks who fall into this category. For those letters have fallen through the cracks, don’t get caught off-guard.
I’ve heard that quite a few ‘08 home buyers have either forgotten or thought the tax credit was forgiven. some believe that the loan had been forgiven as Congress subsequently passed different versions of the home buyer credit that did not require a payback. Well the ‘08 tax credit hasn’t been forgiven.
If you got the credit and have sold your house or it is no longer your primary residence, the total amount you owe is due on the return for the year those events took place, with some exceptions.
If in doubt consult a qualified Kansas City accountant or CPA. If you need a referral, maybe we should talk.
If the $7500 first time home buyer tax credit was used to purchase the home…did you know it is time to start paying back the tax credit?
For many people who purchased a home for the first time in 2008, it’s payback time.
It sounded like a great deal at the time: become a first-time home buyer and pocket up to $7,500 in a tax credit, right? But if you bought that house in 2008 and received the tax credit, you’re required to start paying it back – now. I suggested the USDA loan at the time, but I know many home buyers still eyed what they thought was free money. There were even rumors that the tax credit would be forgiven.
The tax credit in 2008 was actually an interest-free loan provided by the government to stimulate a near-dead housing market. Unlike the home buyer credits of ‘09 and ‘10, this one must be paid back over 15 years beginning with this year’s tax return.
For someone who got $7,500, that’s $500 a year.
The 2008 credit was available to qualified home buyers who purchased after April 8, 2008, through the end of that year. The IRS have started sending letters reminding folks who fall into this category. For those letters have fallen through the cracks, don’t get caught off-guard.
I’ve heard that quite a few ‘08 home buyers have either forgotten or thought the tax credit was forgiven. some believe that the loan had been forgiven as Congress subsequently passed different versions of the home buyer credit that did not require a payback. Well the ‘08 tax credit hasn’t been forgiven.
If you got the credit and have sold your house or it is no longer your primary residence, the total amount you owe is due on the return for the year those events took place, with some exceptions.
If in doubt consult a qualified Kansas City accountant or CPA. If you need a referral, maybe we should talk.
RE/MAX sells more homes than any other real estate company.
For a reason...should we talk?
Let us know what you think or add to our blog by writing a comment. Do you have a real estate question for the Real Estate Wizards? Email us at RealEstateWizard@DowellTaggart.com
Blog post written by the Dowell Taggart Team of RE/MAX Best Associates
Go to our Kansas City Real Estate Website!
1 Comments
Are you a first time home buyer? At this exciting stage in your life you need to be aware of the magnitude of your decisions as buying a home is a massive investment. For most of us, buying a home is the biggest investment we will ever make. While the process of buying a new home may seem fairly straight forward to many it can be a bit daunting for new buyers who are not familiar with all the processes and procedures. Don’t let it overwhelm you and don’t panic. Learn more:
ReplyDeleteHome credit tips
Thank You for commenting on our Blogger blog, http://OnlineKansasCity.Blogspot.com!
Just an FYI: Spam will not be published.