New Home Buyers Tax Credit

[rsandy]

The client is eligilble to take the full credit of $ 7,500.00 which would result in a refund of $ 5,541.00. But since he needs to begin payback in 2010, can he elect to only take the amount of credit necessary to cover the amount of tax owed $ 1,959.00 thereby reducing the amount of his future repayment?
Thanks

[David1980]

There doesn't appear to be any mechanism to do this in the tax code. What you could do is override the amount on the 5405 to take whatever he wants, I doubt the IRS would care.

But realistically with an interest free loan there is no reason not to take all of it. For example if he takes the full $7500 he can use the extra $5541 to pay down the principal on his mortgage. At 5% interest that would save him $277 per year in interest. It ends up being a tidy sum over the life of the payback.

[rsandy]

Good thought. Thanks so much

[solomon]

A dollar to a doughnut, Congress will do away with the pay back before 2010.

[Larmil]

A dollar to a doughnut, Congress will do away with the pay back before 2010.

I Think that saying goes back to when doughnuts were a nickle (: