PDA

View Full Version : Taxes, and 2008 Home Buyer Credit


Mills
01-30-2014, 20:59
Need a little help here guys, trying to find out if anyone has been through a similar situation...........

In 2008, Pre market crash I purchased a home and received the $7500 interest free loan from uncle sam when I filed my taxes. I figured, what the hell I will take and pay it back interest free over the course of 15 years.

So.....I started paying it back in the 2010 tax year at $500 and have done so in 2011 and 2012. The catch is that I got orders to 5th Group at the end of 2010 and moved to Campbell and was unable to sell my house, so I put it up for rent. Whilst having my taxes done at the center on post, no one really did any diligence in regards to the regulation on the credit and PCS moves, so I just took their word for it.

Today, I went to file my 2013 taxes at HR Block because I am not going back to post after having to file 3 amended returns for previous mistakes. They noticed that I was paying the tax credit back and were somewhat shocked. Then opened the tax regulation book and explained to me that for tax year 2011 I should have been exempt from repaying the home credit since I moved due to PCS orders and that home was no longer my primary residence.

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.

The staff at HR Block all agrees that I should not have been paying that $500 per year back after the 2010 tax year due to being exempt from repaying it. I guess i was skeptical because I turned the house into a rental, however turning the house into a rental qualifies as the home not being your main residence...........

So who knows, It looks to me like it is all up to interpretation.

Anyone have a situation like this and have any advice on what to do? I am thinking that if the norm seems to be that persons who fall within this category are exempt from repayment, then I am going to file amended returns for 2011 and 2012 and try and recoup that $1000. Along with never having to deal with this mess again.

If I only could have waited 6 months later, I could have gotten me some of dat free Obama money

Thanks in advance.

Eagle5US
01-31-2014, 06:02
You are not obligated to pay any longer on the home buyer credit. You have to fill out a schedule 5505 (I think - gotta check my previous filings to be certain) and check the box for permanent move under military orders.

The only caveat is that you have to file the form EACH YEAR. I did not know this and last year it delayed my refund by 4 months.

Word to the wise...those on post muldoons attend a 40 hour (i.e. 1 week) class on how to operate the software and what the forms look like.
I wouldn't trust them to do my taxes any more than I would trust them to wash my Corvette:rolleyes:

Streck-Fu
01-31-2014, 06:21
Could an amended return be filed for the previous years and the associated payments to get that money back? Could it be reimbursed on this year's filing?

Eagle5US
01-31-2014, 06:24
Could an amended return be filed for the previous years and the associated payments to get that money back? Could it be reimbursed on this year's filing?
No clue on that....you may be able to TRY...but amended filings that result in more money back to the taxpayer tend to target folks for audits.:rolleyes:
Just an observation that seems to have played out with more than a couple of my past acquaintances...

1stindoor
01-31-2014, 07:47
Word to the wise...those on post muldoons attend a 40 hour (i.e. 1 week) class on how to operate the software and what the forms look like.
I wouldn't trust them to do my taxes any more than I would trust them to wash my Corvette:rolleyes:

Which is why the wife and I have gone to the same CPA and tax preparer for more than 10 years.

Mills
01-31-2014, 18:29
Yeah, They seemed ok for the basics, but special circumstances like mine, they were clueless at first, then seemed to have an explanation. Which turned out to be wrong. Don't quite see how they could have been so wrong, when it is clearly defined in the tax code. So I am partially at fault for not doing a QA/QC on what they said.

The staff at HR Block thinks that I should file amendments to the two previous years in order to recoup the $1000, additionally the tax center did not factor in depreciation towards my rental house so there was another hit in regards to my previous years. Who knows if things will change for the better or not.

Being that I have been claiming said house as a rental since 2011, I am wondering if it will really raise any eyebrows at the IRS since I am really just making things correct across the board.

cat in the hat
02-02-2014, 10:58
If I only could have waited 6 months later, I could have gotten me some of dat free Obama money

if i had waited to close on my place for just 11 days i would have gotten the 8k without paying back.

on your situation, are you claiming the rent as income? IRS expects you to and you should weigh the benefits/costs before you amend a return.

Mills
02-02-2014, 13:07
If I only could have waited 6 months later, I could have gotten me some of dat free Obama money

if i had waited to close on my place for just 11 days i would have gotten the 8k without paying back.

on your situation, are you claiming the rent as income? IRS expects you to and you should weigh the benefits/costs before you amend a return.

I am, since it is required.

But usually with the subtraction of interest, insurance, management fees, and repairs I usually end up with about 4K of income on that property. Which..........If I amend and add the depreciation for the house, that should almost take it down to no income on that property. I am going to see if the numbers make sense before filing and go from there.