Your Tax Questions Answered
Home Buyer's Credit
-- When the Check Comes
Kiplinger editorial director Kevin McCormally and fellow tax experts Peter Blank and Mary Beth Franklin tackle your most pressing tax challenges.
By Kevin McCormally, Editorial Director, Kiplinger.com
February 5, 2010
QUESTION:
My wife and I purchased a home on May 27, 2009 which qualified for the $8,000 credit.
We were advised that we could file an amended return for 2008 to claim the credit, and we did so.
It is now 2010, and the latest from the IRS is that the refund should be coming in the mail within the next several weeks.
My questions are:
• Will this $8,000 need to be declared as income?
• What category would the income be classified as on a 1040?
• Should it be declared on another 2008 amended return, or on the 2009 return, or because we still haven’t received it, on the 2010 return?
Thanks for your help with this question. If there is an IRS publication which goes into this, it would be helpful to know the number.
KEVIN ANSWERS:
There’s no IRS publication on this credit but, good news, when you get your $8,000 check it is NOT considered income, so there’s no place to report it on your return. The only tax consequence is that the $8,000 reduces your basis in your new home. If you paid $200,000 for the house, the $8,000 credit would reduce your basis – the amount from which you will determine gain or loss on the sale – would be $192,000. That usually doesn’t matter, of course, since the first $250,000 of gain on the sale of a home ($500,000 for married couples) can be tax free.
Reader Comments (8)
Posted by: Jack at 02/06/2010 04:08:30 AM
My Son lives and has a resident in Taiwan, works for a contractor in Afganistan. He sends money monthly to us to assist and supplment our social security. My question is; can he deduct us on his taxes? Thanks
Posted by: Roger at 02/06/2010 11:10:10 AM
I too, filed an amended 2008 return claiming the $8000 credit and have yet to receive a check. Now that it's filing season for 2009, my question is the same as this guys 3rd question..."Should it be declared on another 2008 amended return, or on the 2009 return, or because we still havent received it, on the 2010 return?
Posted by: Richard Powers at 02/06/2010 01:21:54 PM
Yoy had a deduction for buying a water heater. will that apply to 2010? Where is it diascussed? Thank you
Posted by: c.e. scott at 02/07/2010 05:03:18 PM
i ve rec a lump sum settlement from my prev employer since they are no longer going to pay for my senior advantage med coverage. they have deducted several hundred dollars for soc/medicare. i retired in 1984, do i have to pay this tax?
Posted by: Marie at 02/07/2010 07:45:58 PM
Can one claim both the energy tax credit and the educational credit on 2009 tax forms.
Posted by: sanny at 02/08/2010 01:27:18 AM
If your house is in foreclosure how does this affect filing an income tax report.
Posted by: Tom at 02/08/2010 08:11:29 AM
A friend of mine purchased and filed the amended 2008 return. His check was also delayed and he was actually paid interest for the time he waited for it.
Posted by: francisco gatell at 02/08/2010 04:15:59 PM
I AM 72 AND ON SOCIAL SECURITY AND I DO SOME REAL ESTATES SALES ON COMMISSION. I WILL BE RECEIVING A FORM 1099 FOR MY COMISSION INCOME IN 2009. IF I OPEN A 401K ACCOUNT, IT S MY UNDERSTANDING THAT I WILL NOT HAVE TO PAY THE SELF-EMPLOYED SOCIAL SECURITY TAX (15%). IS THIS CORRECT? PLEASE ADVISE.