Inquiring minds are looking at the first-time homebuyers from 2008 who bought home. It sounded like such a great deal: Become a homebuyer and pocket up to $7,500 in a tax credit. Unfortunately, if you bought that house in 2008 (and received the credit), you must begin to pay it back – now. On your 2010 tax return:
The 2008 credit was available to qualified homebuyers who purchased after April 8, 2008, through the end of that year. The IRS has sent letters reminding folks who fall into this category, including 45,865 taxpayers in New York State.
Many have been caught off-guard. They either forgot that the credit was a loan, or believed the loan had been forgiven as Congress subsequently passed different versions of the homebuyer credit that did not require a payback.
“I had one client who called me in a slight panic,” said Jonathan Horn, a certified public accountant. “People are confused.”
If you got the credit and have sold your house or it is no longer your primary residence, the total amount you owe is due on the return for the year those events took place, with some exceptions.
But hey, at least home values have gone up since then!
Oh, yeah, that’s right…housing values have continued to decline. So the government pushed even more people into bad housing decisions.
It must be time once again for the 10-most-feared-words-in-the-English-language:
“I’m from the government, and I’m here to help you.”
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