Another FTHBC

[S T]

It is my understanding that any T/P that qualified in 2008 for the FTHBC for $ 7,500 has a repayment schedule, starting in year 2010.

My t/p phoned today, we filed a FTHBC for $7,500 on the 2008 tax return and she is aware and signed the statement undertstanding that she will have to repay $500 per year starting in 2010 over the next 15 years, or any other change, whichever occurs first.

My t/p stated that her son (in Oregon) I did not prepare return, purchased on or about the same date she did in Oct, 2008, and he phoned his tax preparer questionning the repayment schedule. He was advised that HE DOES NOT HAVE TO REPAY!! ???? He also received the $7,500 tax credit on his 2008 tax return.

Question: Is there a change on the 2008 Credit $ 7,500, so these Home Buyers do NOT have to repay, or am I wrong in my information, or is the other preparer wrong in the information?

Sandy

[solomon]

The other preparer is incorrect. Perhaps §36 will be amended in the future, but as of now there is a pay back for purchases in 2008.

[fliszt]

Sandy, I have

been scouring the tax codes this afternoon searching for my question. But I ran across a lot of info on the 2008 purchase and there was nothing about a change in code. I JUST got off phone trying to explain to a Asian client that he must repay starting in 2010 and he says bank told him he can fill out a 1040X and get the money now without repaying. I sure would like to know the info on where the bank is coming from. i'll keep reading your post answers too.
Hope your summer is going great!
Warm regards,
Larry

[Bees Knees]

Tell your client to tell her son to tell his tax preparer to read page 2 of Form 5405 (Revised as of Feb. 2009)

Homes purchased in 2008. You generally must repay the
credit over a 15-year period in 15 equal installments. The
repayment period begins in 2010 and you must include
the first installment as additional tax on your 2010 tax
return.

Homes purchased in 2009. You must repay the credit
only if the home ceases to be your main home within the
36-month period beginning on the purchase date.

[fliszt]

Sorry Sandy,

I just read the reply from Bees on my question and then came over here to tell you that, but Bees had already posted the answer.
Thanks again Bees, for keeping some egg off my face tomorrow when I meet with my client. There is a language barrier between us but I'm sure I can explain all is ok to claim on the 08 w/no repayment unless prop is sold in 3 yrs
Larry

[Bees Knees]

I’m not necessarily for or against all of these government free handouts. I’m only interested in learning the tax rules and obeying the rules. However, would it have been such a budget breaker to have retroactively changed the First Time Homebuyer Credit rules, so that those who purchased homes in 2008 could have the same tax break as those who waited until 2009?

If I purchased a home in 2008 because I was following the government’s encouragement to stimulate the home buying market, I think I would be very angry at having to re-pay the credit over 15 years. I think the government has destroyed all tax planning. Why in the world would I ever tell a client to do something, knowing there is a good chance a better handout could be just around the corner?

[newbie]

I think the government has destroyed all tax planning. Why in the world would I ever tell a client to do something, knowing there is a good chance a better handout could be just around the corner?

Energy credits are another example, don't know how many people I told credit expired on 12/31/2007.period. Then in October they sign a bigger, better credit starting 01/01/2009, and several of these people want to know "why I didn't tell them, they could have waited ya know"! If the "on" switch on the crystal ball was turned ON I surely would have told them!

[S T]

Thank You

Thanks everyone! I thought maybe I had missed something. My client had spoken with her son who purchased at almost the same time period in 10/08 and then a new neighbor that purchased early 12/08 - and of course everyone was talking about the FTHBC. When it was mentioned that the $7,500 credit was received and comparing notes (you know how clients are) they other two people, said yes they received the 7,500 but did not have to pay it back per their Tax Preparers, and of course my client wondered why she had to (at least as of today)!

Gotta Luv It!!

Sandy

[Lion]

Sometimes

And, sometimes our clients hear what they want to hear, or it gets changed like that childhood "telephone" game. I've had clients insist someone told them they don't have to pay back their credit from 2008. As I ask more questions, it becomes clear they were told about the 2009 credit in comparison to their own 2008 home purchase. Of course, if their info came from a realtor or banker or hairdresser or coworker's cousin's mechanic, the original info may have been incorrect or incomplete or simply fantastical. If it started with a busy tax preparer who takes continuing education seriously, I hope it started out as correct. I've seen a few kitchen table tax preparers for their same old clientele that punt when a new situation comes their way instead of investing in a good update course.