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Re: First time home buyers tax credit

By: clo in POPE | Recommend this post (0)
Fri, 24 Feb 12 3:59 PM | 53 view(s)
Boardmark this board | (The) Pope's for real stock market report 		Msg. 51904 of 65535
(This msg. is a reply to 51903 by Zimbler0)
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Why do you label him 'a poor sap'?
This is clearly laid out, didn't he READ the program?

I would think this would please you & most of us to know taxpayers are NOT paying 7500.00 to folks, but are loaning them the funds. Stretching the payments out without interest is a GIFT in itself.
Bottom line it was HIS choice.

Q. How and when is the credit repaid?

A. The first-time homebuyer credit is similar to a 15-year interest-free loan. Normally, it is repaid in 15 equal annual installments beginning with the second tax year after the year the credit is claimed. The repayment amount is included as an additional tax on the taxpayer’s income tax return for that year. For example, if you properly claim a $7,500 first-time homebuyer credit on your 2008 return, you will begin paying it back on your 2010 tax return. Normally, $500 will be due each year from 2010 to 2024.

You may need to adjust your withholding or make quarterly estimated tax payments to ensure you are not under-withheld.

However, some exceptions apply to the repayment rule. They include:

If you die, any remaining annual installments are not due. If you filed a joint return and then you die, your surviving spouse would be required to repay his or her half of the remaining repayment amount.
If you stop using the home as your main home, all remaining annual installments become due on the return for the year that happens. This includes situations where the main home becomes a vacation home or is converted to business or rental property. There are special rules for involuntary conversions. Taxpayers are urged to consult a professional to determine the tax consequences of an involuntary conversion.
If you sell your home, all remaining annual installments become due on the return for the year of sale. The repayment is limited to the amount of gain on the sale, if the home is sold to an unrelated taxpayer. If there is no gain or if there is a loss on the sale, the remaining annual installments may be reduced or even eliminated. Taxpayers are urged to consult a professional to determine the tax consequences of a sale.
If you transfer your home to your spouse, or, as part of a divorce settlement, to your former spouse, that person is responsible for making all subsequent installment payments.




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The above is a reply to the following message:
First time home buyers tax credit
By: Zimbler0 in POPE
Fri, 24 Feb 12 6:08 AM 		Msg. 51903 of 65535

A buddy of mine at work told me he qualified for a
'First Time Home Buyers Tax Credit' . . . .
Except that, as it turns out, it was not a credit
and now the poor sap has to pay the IRS an
extra $500 a year . . . . seems the 'tax credit'
was 'washingtonese' for a no interest loan.

http://www.irs.gov/newsroom/article/0,,id=186831,00.html

Tax Credit to Aid First-Time Homebuyers; Must Be Repaid Over 15 Years

NOTES:

March 23, 2011: See Update on First Time Homebuyer Credit and Tax Refunds
The 2009 Worker, Homeownership and Business Assistance Act and the American Recovery and Reinvestment Act updated the first-time homebuyer tax credit.
IR-2008-106, Sept. 16, 2008

WASHINGTON — First-time homebuyers should begin planning now to take advantage of a new tax credit included in the recently enacted Housing and Economic Recovery Act of 2008.

Available for a limited time only, the credit:

Applies to home purchases after April 8, 2008, and before Jan. 1, 2009.

Reduces a taxpayer’s tax bill or increases his or her refund, dollar for dollar.

Is fully refundable, meaning that the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax that they owe.

However, the credit operates much like an interest-free loan, because it must be repaid over a 15-year period.

So, for example, an eligible taxpayer who buys a home today and properly claims the maximum available credit of $7,500 on his or her 2008 federal income tax return must begin repaying the credit by including one-fifteenth of this amount, or $500, as an additional tax on his or her 2010 return.

(Site does go on . . . Zim.)

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