Financing in 80022>Question Details

Juan Martinez, Both Buyer and Seller in 80022

I received the first time homebuyer tax credit in 2008.

Asked by Juan Martinez, 80022 Sat Apr 28, 2012

This was a tax free loan which has to be repaid over the next 15 years. I recently sold my home and I did have a capital gain. If I take the money I made from my sale and put it back into the purchase of my next home am I still required to pay the full remaining balance the next tax year?...or can I still pay the $500 yearly increments?

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This is a question best answered by a tax professional.

The IRS site has a page which related to the tax credit when it was available in 2008. See it in the link below. I believe that once you sell the home the recapture of the tax credit is accelerated so that the full amount becomes due (and not parceled out by $500 per year). But you're repayment is also limited to the capital gains (as determined by the IRS formula).

As always, seek the advice of a tax professional. And when you talk to them, show them a copy of the IRS instructions (see link).
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