Important question: When did you buy your home? If you purchased your home in 2008 as part of the Housing and Economic Recovery Act of 2008, you have to pay the entire amount back (up to $7500) in 15 installments of $500 as part of your tax returns, starting with your tax return for the year 2010. If you sell your home or it ceases to be your "main" home (i.e. you rent it out), you have to pay the remaining balance back when you file your tax return for the year in which you convert the house from your "main" home.
If you bought your home with the First-Time Homebuyer Credit under the Housing and Economic Recovery Act of 2009 or 2010, then the rules are a little different. You do not have to repay any the tax credit you received (up to $8000) if your house remains your "main" home for 36 months. However, if you sell your house or convert it entirely to a business or rental property, you must repay the full amount of the credit.
Please let me know if you have any questions or there is anything I can help you with in regards to this topic! For much more detailed information on this topic, please see the IRS's website on the First-Time Homebuyer Credit.
Disclaimer: I am not a CPA and am not offering tax advice. I am not liable for your interpretation of IRS tax law based on this summary. Please consult your CPA for answers and applications for your specific situations.
Kyle Pfaffe, REALTOR KylePfaffe@kw.com 512-636-9707 www.AustinHomes4You.com
Kyle Pfaffe, REALTOR KylePfaffe@kw.com 512-636-9707 www.AustinHomes4You.com