My daughter bought a condominium in 2008. Does she still need to pay back the 2008 first-time home-buyer credit? I heard that she does, but that doesn’t seem fair.
Sometimes life isn’t fair -- she does need to pay back the credit. The 2008 first-time home-buyer credit wasn’t nearly as generous as the current credit.
People who bought first homes from April 9, 2008, through December 31, 2008, could receive a tax credit of up to $7,500 if they hadn’t owned a home in the three years leading up to the purchase of their new home. But that credit must be repaid over 15 years, starting two years after they claim the credit.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Your daughter doesn’t need to do anything this year, but she must start repaying the credit when she files her 2010 tax return next spring. If she got the maximum $7,500 credit, she must add $500 to her income tax bill each year for the next 15 years. And, if she stops using the condo as her primary residence, any remaining balance of the credit must be repaid when she files her tax return for the year she sold the home or moved. The payback amount, however, can’t exceed the amount of profit made on the sale.
The newer version of the first-time home-buyer tax credit is different. People who close on a new home from January 1, 2009, to June 30, 2010 (and sign a binding contract by April 30, 2010), can qualify for a first-time home-buyer credit of up to $8,000. This credit doesn’t need to be repaid, as long as they live in the home for at least three years. For more information about the rules for the 2009 and 2010 credit, see FAQs on the New Home Buyer Tax Credits. For details about the 2008, 2009 and 2010 credits, see the IRS’s First-Time Home Buyer Credit: Answers.
-
Aging: The Overlooked Risk FactorSponsored Elder care is a personal and financial vulnerability many people fail to plan for.
-
AI vs the Stock Market: How Did Alphabet, Nike and Industrial Stocks Perform in June?AI is a new tool to help investors analyze data, but can it beat the stock market? Here's how a chatbot's stock picks fared in June.
-
Ask the Editor, June 27: Tax Questions on Disaster Losses, IRAsAsk the Editor In this week's Ask the Editor Q&A, we answer tax questions from readers on paper checks, hurricane losses, IRAs and timeshares.
-
2025 SALT Cap Could Hurt Top 'Hidden Home Cost'Tax Deductions The latest GOP tax bill might make hidden homeowner costs worse for you. Here’s how.
-
No Social Security Tax Cuts in Trump’s 'Big Bill'? What Retirees Need to KnowTax Policy Eliminating taxes on Social Security benefits is missing from President Trump’s proposed tax overhaul. Here’s why and what an alternative offering could mean for retirement taxes.
-
Ask the Editor, June 20: Questions on Tax Deductions and IRAsAsk the Editor In our latest Ask the Editor round-up, Joy Taylor, The Kiplinger Tax Letter Editor, answers four questions on deductions, tax proposals and IRAs.
-
Five Surprising GOP Senate Bill Tax Changes to KnowTax Policy Senate Republicans released proposed tax changes for Trump’s ‘one big, beautiful bill.” Some provisions are already stirring debate.
-
Senate Seeks $6,000 'Bonus' Tax Deduction for Those Age 65 and OlderTax Reform Under Trump’s ‘big bill,’ the Senate Finance Committee has proposed a larger bonus tax deduction for older adults than the House. Will it pass?
-
Don't Miss These Four Tax Breaks for Americans Living Abroad in 2025International Tax U.S. expats can reduce their tax burden by taking advantage of a handful of tax credits and deductions.
-
Summer Backyard Ideas With Added Tax Benefits for 2025Tax Tips Find out how these summer 2025 home projects can help you save on taxes next year.
