If you bought a house in 2008, and took advantage of the $7,500 credit, your timing was not so good. Those who bought in 08 will need to repay that money to the IRS.
MSNBC’s Allison Linn explains:
Uncle Sam has a reminder for some people who took advantage of the first-time homebuyer tax credit three years ago: He wants his money back.
Americans who bought homes in 2008 using the government’s tax credit will be required to start repaying the credit beginning with their 2010 tax return, according to the Internal Revenue Service.
In an odd twist, those who took advantage of a nearly identical tax credit in 2009 or 2010 will not be required to pay it back.
Under the terms of the 2008 tax credit, the credit must be paid back over a 15-year period, beginning with this year’s return.
That means anyone who took the maximum $7,500 credit will have to add $500 to their income tax liability for 15 years. If you sell your house before the 15 years are up, the entire tax credit bill will be due the year the house is sold.
The Internal Revenue Service describes the 2008 program as “like an interest-free loan.”
(Thanks to Marty Wolk for the heads up!)
