AnnieR Posted March 5, 2013 Report Share Posted March 5, 2013 Young man purchased his first home 2 years ago (I think, his mother wasn't sure) and received the $8000 credit. The home was in KY. The company he works for transferred him back to OH this year..same co. as the one in KY. Will he have to pay back the entire $8000 or a portion. He has his home in KY up for sale and is looking for one to purchase in OH. Any suggestions would be appreciated. AnnieR Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 5, 2013 Report Share Posted March 5, 2013 You must report the sale or other disposition of your main home on a completed Form 5405, First-Time Homebuyer Credit and Repayment of the Credit, and attach it to your tax return for the year of the sale or other disposition. The IRS matches information from a variety of sources when your home is sold, destroyed, foreclosed on, or is no longer your main home. If you received the FTHBC and the IRS has information that the home is no longer your main home, the IRS checks your tax records to find out if you reported the sale or other disposition on the Form 5405. You may or may not have to repay the credit, but you do need to report the change to the IRS on the Form 5405. The IRS sends you a CP03c Notice, Important information regarding your First-Time Homebuyer Credit, when it has information your home is no longer your main home and you did not report the sale or other disposition on your federal tax return. This notice reminds you to report the sale or other disposition of your home on the Form 5405. Given the info presented, he will have to pay it ALL back if it is not used as his home for the full three years. Quote Link to comment Share on other sites More sharing options...
jainen Posted March 5, 2013 Report Share Posted March 5, 2013 >>Given the info presented, he will have to pay it ALL back<< You must have had a tough day, kc--you don't usually give up so easily! The Instructions for Form 5405 say you repay the credit "with the tax return for the tax year in which the sale is completed." Also, "the repayment in the year of sale is limited to the amount of gain on the sale as determined in Part III of Form 5405." Therefore, I think the taxpayer has another whole year to read those instructions in detail. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 5, 2013 Report Share Posted March 5, 2013 I did not mean he had to repay it in this return. Annie was asking what advice she should give him. You do make an excellent point, tho, that his repayment will not exceed his gain. Quote Link to comment Share on other sites More sharing options...
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