Received First Time Home Buyer Tax Credit, Now I Want to Sell

by Tabitha B
(Havana, FL)

I received the $8000 first time home buyer tax credit, now I want to sell before the 3 year period is up. My husband and I bought our house in July 2009. We received the $8000 credit, but now my husband has taken a job in another state.

We need to rent or sell the house, either way, we would have to pay the government back. How is this done and how much will we owe?

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ANSWER
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Tabitha,

That is a very good question. Unfortunately, you will have to check with a tax preparer about how the IRS will have you pay the money back and how much they will require.

Here's what I found off the IRS website:

You have to live in the house for 36 months from the date of purchase. IF you move out or sell it before that time is up, you have to repay the credit.

They will be looking for repayment of the full amount in the tax year you sold or moved out. The full amount will show up as an additional tax on your return for that year.

So be sure to check with your tax preparer for any exceptions or whether you would have to pay this back all at once or on a graduated scale.

Hope this helps,

Jeff