Couple buys home in 2009, is eligible for the FTHBcredit. How long must they live in it to keep the money. What if they build another house and move, does the credit transfer to the new home? What if they move to the new home and rent the old home? Couldn't find a website about the new rules.
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From the JCT.If the taxpayer disposes of the home, or the home otherwise ceases to be the principal residence of the taxpayer, within 36 months from the date of purchase, the present law rules for recapture of the credit will still apply. -
What's JCT? Is there a percentage of payback, or all?Comment
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IRS website
Q. If I claim the first-time homebuyer credit in 2009 and stop using the property as my main home before the 36 month period expires after I purchase, how is the credit repaid and how long would I have to repay it?
A. If, within 36 months of the date of purchase, the property is no longer used as the taxpayer's principal residence, the taxpayer is required to repay the credit. Repayment of the full amount of the credit is due at that time the income tax return for the year the home ceased to be the taxpayer's principal residence is due. The full amount of the credit is reflected as additional tax on that year's tax return. Form 5405 and its instructions will be revised for tax year 2009 to include information about repayment of the credit. (05/06/09)Comment
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JCT is the Joint Committee on Taxation - consisting of some members of Congress. In effect, they help simply a particular Law and it is considered one of the authorities in the Regulations.Originally posted by JenMO View Post
No percentage pay back so if the credit is taken, it behooves the buyer to use it as a principal residence for 36 months or have 8K handy. However, as I recall some of the original ยง36 exceptions apply. For example, if sold to an unrelated party after the first year and before the third year of use, then repayment will not be more than the profit.
Last edited by solomon; 08-20-2009, 03:48 PM.Comment
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You recapture when you start renting, right?
The "limited to gain" would arise only if you sell I assume.
What if you sell a year or so later after you have already recaptured the credit??Comment
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