Buying A Home
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Repayment of '09 first time home buyer's tax credit
DH and I bought our first home in April of 2009. His job is transferring him out of state in February. If we buy a new home in the new state, but don't sell our home until after April 2012 (so we would have owned it the required 3 years,) would the IRS find out and make us repay?
Re: Repayment of '09 first time home buyer's tax credit
Yeah, 'cause defrauding the government is always a fantastic idea.
Let me know how that IRS audit works out.
If I remember correctly, the house you bought has to remain your primary residence for 3 years from the date of purchase. Therefore, you cannot move unless you want to re-pay the $8k.
Yes, the IRS will see you... especially if you buy a new house. Maybe not right away, but they pretty much see everything. And if they don't see it right away, but see it in a few years, you get the joy of interest and penalties on $8k. Woohoo!!!
http://pandce.proboards.com/index.cgi#general
Yeah, that's never a good idea. The house has to remain your primary residence for 36 months so even if you 'own' it, it's not your primary home.
However, you should talk to a realtor to get a market analysis to see how much your house could bring in. Then go talk to a CPA about it. I can't link but there is an FAQ on the IRS.gov site in regards to first time homebuyer credits. You only repay the gain on the sale of your house up to $8000. I'm going to guess that unless you got an amazing deal, by the time you account for realtor fees, etc. that you won't be making any money.
Actually, per IRS regulations, you only have to repay the amount of money you make as gain on the sale of the home, so if you (like everyone else selling right now) end up taking a loss on the home, there is no loss:
From the irs.gov website:
DH moves and rents a room or apartment. (Actually a good idea to rent in a new area until you are sure where you want to buy).
You stay behind for 2 months and put the house on the market to close no sooner than April.
This was a thought that we have talked about. We could put the house up for sale before April, right?
That's another tax credit and you have to repay any of the credits when you sell. The 15 year repayment was an interest free loan (credit) that is paid back over 15 years as long as you live there.
We figured up the other night that we have put at least $16,000 into this house in the past 2.5 years. Does that mean we would be able to sell it (and try to get back what we put into it?) before that 3 years is fully up and NOT repay?
Thanks for your help ladies. This is all new and kinda confusing to me! The major stress we are under (plus being 8 months pregnant) is really weighing on me.
If you guys made $16k in capital improvements to the property that number is then added to your adjusted basis. So an example: You buy for $200k you get the $8k credit so your adjust basis is now $192k. You put $16k in capital improvements into the property, your basis is now $208k. So if you closing costs are 7% ($14,560) you would only have to repay the credit if you sell for more than $222,560 (after any seller concessions you may pay).
Hope this helps! So if you sell for $225k you would only have to repay the portion over $222,560 so $2,440. I would suggest talking to a CPA about this and also about what is considered a capital improvement. Not all updates are considered capital improvements and you will need documentation for all of them. Good luck. We put our house on the market 10 days after I had DS2 so that was a super fun time!
can i send you a pm?