telephus44
Well-Known Member
Joined: Dec 23, 2010 10:20:21 GMT -5
Posts: 1,259
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Post by telephus44 on Feb 16, 2012 7:15:53 GMT -5
...this is the one that has to be paid back - I checked out irs.gov on this and want to make sure I'm understanding it correctly. If we sell the house at a loss, do we NOT have to pay back the balance of the credit? We purchased in 2008 for 231K, could probably sell it for around 200K now.
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mwcpa
Senior Member
Joined: Jan 7, 2011 6:35:43 GMT -5
Posts: 2,425
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Post by mwcpa on Feb 17, 2012 6:48:09 GMT -5
from IRS
"Q. When do I repay all or a part of the credit?
A. Here are the conditions under which you repay all or a part of the credit:
You sold your main home to a non-related person or entity. You repay the remaining amount of the credit limited to the amount of your gain. Note: when calculating gain or loss on your main home, you reduce your basis by the amount of the credit you received that you have not previously repaid. See Publication 551, Basis of Assets, for more information.
For example, you purchased a principal residence for $95,000 on April 30, 2010, and took the $8,000 credit. You sell your principal residence to an unrelated person for $90,000 on Feb. 14, 2012. To determine if you must repay any amount of credit, you must adjust the basis of the property by $8,000, which is the amount of the credit you received. The revised basis is $87,000 ($95,000 minus $8,000). The gain on the sale is $3,000, which is the amount of credit that you must repay with the tax return for the year of the sale of the principal residence. "
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