Payback is due for those who took advantage in '08, not in '09 or '10
Uncle Sam has a reminder for some people who took advantage of the first-time homebuyer tax credit three years ago: He wants his money back.
Americans who bought homes in 2008 using the government’s tax credit will be required to start repaying the credit beginning with their 2010 tax return, according to the Internal Revenue Service.
In an odd twist, those who took advantage of a nearly identical tax credit in 2009 or 2010 will not be required to pay it back.
Under the terms of the 2008 tax credit, the credit must be paid back over a 15-year period, beginning with this year’s return.
That means anyone who took the maximum $7,500 credit will have to add $500 to their income tax liability for 15 years. If you sell your house before the 15 years are up, the entire tax credit bill will be due the year the house is sold.
The Internal Revenue Service describes the 2008 program as “like an interest-free loan.”
This may come as a shock to some people, who may have forgotten the terms of the so-called credit, which was really more of a tax deferral. The IRS said it is sending reminders.
“There will definitely be people that are going to be surprised by it,” said Sean M. Dowling, vice president of The Dowling Group in Stamford, Conn., and a certified financial planner.
For others, it paid to be late. If you bought a home in 2009 or 2010 using the same tax credit, you don’t have to pay it back, as long as you stay in your new home for at least three years.
That’s because the government changed the rules regarding the tax credit after the first year, allowing people to take the credit without any requirement that they pay it back.
3 comments:
I Feel this is wrong !!! Everybody should be treated equally no matter what year it is. I think they should amend this(2008) tax rule. People are having a hard time now trying to keep there homes and then slap them in the face the following year(2009)with the same tax credit and those people don't have to pay back the $7,500 tax credit. ( WHAT IS WRONG WITH THIS GOVERNMENT)
Since when do we make tax laws retroactive? Even if you amend the 2008 tax code (which, by the way, anyone taking advantage of the homebuyers credit in 2008 knew it was only a loan, and agreed to pay it back!!), everyone would not be treated equally. I built a house in 2007. No credit OR loan for me, but I'm not fussing about how the 2007 code should be amended so I can take advantage. What about the people that turned 62 the year BEFORE we started social security? Or the people whose kids turned 18 the year before we started to give a child tax credit?
I heard on the news yesterday that the O administration is going to add another 10,000 or so IRS agents to the pool -- to help with tax law enforcement. Their reasoning was that there is about 300 billion of uncollected taxes out there, just waiting to be grabbed!!
Watch out, folks! We are about to become a police state, where they want to tax anything and everything to "pay" for all that deficit spending going on ....
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