My daughter bought a condominium in 2008. Does she still need to pay back the 2008 first-time home-buyer credit? I heard that she does, but that doesn’t seem fair.
Sometimes life isn’t fair -- she does need to pay back the credit. The 2008 first-time home-buyer credit wasn’t nearly as generous as the current credit.
People who bought first homes from April 9, 2008, through December 31, 2008, could receive a tax credit of up to $7,500 if they hadn’t owned a home in the three years leading up to the purchase of their new home. But that credit must be repaid over 15 years, starting two years after they claim the credit.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Your daughter doesn’t need to do anything this year, but she must start repaying the credit when she files her 2010 tax return next spring. If she got the maximum $7,500 credit, she must add $500 to her income tax bill each year for the next 15 years. And, if she stops using the condo as her primary residence, any remaining balance of the credit must be repaid when she files her tax return for the year she sold the home or moved. The payback amount, however, can’t exceed the amount of profit made on the sale.
The newer version of the first-time home-buyer tax credit is different. People who close on a new home from January 1, 2009, to June 30, 2010 (and sign a binding contract by April 30, 2010), can qualify for a first-time home-buyer credit of up to $8,000. This credit doesn’t need to be repaid, as long as they live in the home for at least three years. For more information about the rules for the 2009 and 2010 credit, see FAQs on the New Home Buyer Tax Credits. For details about the 2008, 2009 and 2010 credits, see the IRS’s First-Time Home Buyer Credit: Answers.
-
What Is a Qualified Charitable Distribution (QCD)?Tax Breaks A QCD can lower your tax bill while meeting your charitable giving goals in retirement. Here’s how.
-
Embracing Generative AI for Financial SuccessGenerative AI has the potential to reshape how we approach learning about and managing our personal finances.
-
What Is a Qualified Charitable Distribution (QCD)?
Tax Breaks A QCD can lower your tax bill while meeting your charitable giving goals in retirement. Here’s how.
-
New Law Delivers Tax Breaks to Natural Disaster Victims, But Is It Enough?Tax Relief The legislation provides critical tax relief to thousands of natural disaster victims across the country.
-
Five Tax-Savvy Ways To Donate This Holiday SeasonCharitable Donations Food pantries, toy drives, and animal sanctuaries are popular ways to support others year-round.
-
Can Tariffs Make Childcare More Affordable?Tariffs President-elect Trump suggested tariffs can address the childcare crisis, but economists are doubtful.
-
Are You a Renter? You Could Save on TaxesTax Breaks With these tax savings at your fingertips, rent may be more affordable
-
2025 Open Enrollment: Some DACA Recipients Can Purchase Affordable Care Act Health InsuranceOpen Enrollment Your eligibility to purchase health insurance from the federal marketplace may have changed. Here's what you need to know.
-
Holiday Shopping Tax Tips for Business OwnersTax Deductions Before hitting the sales, businesses should know these key deductions and look out for overspending.
-
NYC Congestion Pricing: Ghost Tax or Necessary Fee?State Taxes Drivers headed to Manhattan’s downtown district will face a new $9 toll in January.
