Homebuyers’ Tax Credit Recapture Starting in 2010
September 30th is the deadline to close on the homes purchased by Apr 30th tax-credit expiration date to earn the tax-credit.
There were two variations to the tax-credit, one for the homes purchased in 2008 and one for those purchased in 2009. For homes purchased in 2008, the tax-credit was $7,500 and only applicable to the first time homebuyers. The credit must be paid back over 15 years starting in 2010. They must report a $500 tax bill on Form 5405. Additionally, if the home is sold within 3 years, the credit must be given back.
For the homes purchased in 2009, the first time homebuyers’ credit was extended to $8,000 and the credit for longtime owners was introduced at $6,500. The credit recapture was scrapped unless the home is sold within 15 years of the purchase.
This is a summary. Please consult with your tax professionals.