Profile picture for nwdsmclist

First Time home buyers tax credit question

I am a first time home buyer under the 2009 first time home buyer $8,000 tax credit program.  There were some things I could not do in the first 3 years I owned the place or I would need to give the $8,000 back.  Regarding that, I have two questions.
1.  Is there any exceptions if it is the government making you move as part of military duty?
2.  Would a contract sale avoid the requirement to repay the tax credit?
  • October 03 2011 - USA
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Answers (2)

Profile picture for sunnyview
There is information here from the IRS that seems to say that

In many cases, the credit repayment (recapture) requirement is waived for members of the uniformed services, members of the Foreign Service and employees of the intelligence community. 

This relief applies where a home is sold or stops being the taxpayer's principal residence after Dec. 31, 2008, in connection with government orders received by the individual (or the individual's spouse) for qualified official extended duty service. The credit is still allowable even if this happens during the year of purchase. Qualified official extended duty is any period of extended duty while serving at a place of duty at least 50 miles away from the taxpayer's principal residence (whether inside or outside the U.S.) or while residing under government orders in government quarters. Extended duty is defined as any period of duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period." 

So you may be able to ask for an exemption from repayment. I am not tax person, but you might be able to ask one or contact your local base legal office. They should be able to reconfirm the IRS rules for you just to be sure that it fits your personal situation. Hope the info helps
  • October 03 2011
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Profile picture for sunnyview
There is some information on the IRS website here about the terms of the 2009 buyers credit. I do not know if there is an exemption for military service moves, but if I can find the link, I'll post it.
  • October 03 2011
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