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Anne
Anne, Master Tax Preparer
Category: Tax
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Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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I got a 1st time home owners loan a couple of years ago. What

Resolved Question:

I got a 1st time home owners loan a couple of years ago. What happens to that loan if we sell the house? Do I have to pay the balance all back at one time?
Submitted: 4 years ago.
Category: Tax
Expert:  Anne replied 4 years ago.

Anne :

what year did you buy the house?

Customer: replied 4 years ago.
2008
Customer: replied 4 years ago.
December 2008
Customer: replied 4 years ago.
,December 2008
Expert:  Anne replied 4 years ago.
HI

Thank you for your question. Whether or not you need to pay back the loan depends on when you purchased your home.

If you purchased your home after April 8, 2008, and before January 1, 2009, and

you claimed and received the one-time credit on your income tax return for 2008, you must repay the balance of the credit when you sell your home before the 15 years it takes to pay the credit back. It is repaid as an additional tax on your tax return. You would file Form 5405, to calculate the $ amount of your repayment.

 

If you purchased the home after 12/31/2008, then you must repay the credit if you sell your home within 36 months from the date you purchased the home

 

However, for homes purchased after 12/3/2008, and sold before the 36 month requirement is met, the amount of the credit that you have to pay back is equal to the amount of gain you receive when you sell the home

 

Example....you purchased a home 1/31/2009 for $95,000, and you received the full $8000 credit.

 

You now sell the home 6/15/12 (so you did not live in the home for the 36 months), and you sell the home for $98,000, which is $3000 more than what you paid for it, so the $ amount of th credit that you must pay back is $3000.

 

 

I truly hope this information is helpful but please do not rate until you are satisfied. If you want to click on 1 or 2 just click on the continue to work with me button instead. You will then be able to add any other info or respond to what I have posted so far. Rating 3-5 gives me credit and a good rating but you can still converse with me."

 

Expert:  Anne replied 4 years ago.
Since you purchased the home in 2008, then you will have to repay the full credit less the $ amounts you paid in 2010 & 2011

Again, I truly hope this information is helpful but please do not rate until you are satisfied. If you want to click on 1 or 2 just click on the continue to work with me button instead. You will then be able to add any other info or respond to what I have posted so far. Rating 3-5 gives me credit and a good rating but you can still converse with me
Anne and other Tax Specialists are ready to help you
Expert:  Anne replied 4 years ago.
Thank you for the accept! Please let me know if I can help you in the future.