If you "flipped" a house for profit, the government would like its money back. By Kevin McCormally, Chief Content Officer April 10, 2012 Did you, or someone you know, sell a house in 2011 that was purchased under the government's new-home-buyer tax-credit law? If so, it may be payback time.Part of the deal for earning a $7,500 credit in 2008 -- or the $6,500 or $8,000 credit for 2009 or 2010 purchases -- was that you stay in the house for at least three years. Congress didn't want to encourage more of the flipping that helped create the housing crisis in the first place. The stick to go along with that valuable carrot was a demand that those who sold within three years repay the credit in full with the tax return of the year of the sale. That means some 2011 sellers could be facing a big bill. But there's a big but. Advertisement Although it's not widely known, you're never required to pay back more than the profit you made on the sale of the home. So if you sold for a loss, no payback is required. When figuring whether you had a gain, you must reduce your tax basis by the amount of the homebuyer credit you received. If you bought for $150,000 and got an $8,000 credit, for example, your basis is just $142,000. If you got more than that for the sale – after all your expenses -- you have a profit ... so part of the credit has to be repaid. You figure just how much on Form 5405. Be careful when you complete that form to make sure you don't repay more than you have to. Special Extension Advertisement And -- for a few -- there's still a way to claim the home buyer credit on a purchase made in 2011, courtesy of a rule for members of the uniformed armed services, the foreign service or the intelligence community who were on extended duty outside the United States at least 90 days during the period after December 31, 2008, and ending before May 1, 2010. If you qualify and you bought a home before May 1, 2011, you may qualify for a tax credit worth $8,000 (for home buyers who didn't own a home in the three years leading up to the purchase of a new home) or $6,500 (for longtime homeowners who continuously owned a home for at least five of the eight years leading up to the purchase of a new home). The credit gradually disappears and is phased out for taxpayers with adjusted gross incomes between $125,000 and $145,000 (for singles) and $225,000 and $245,000 (for married couples who file jointly).