I claimed the $7,500 tax credit for a house that I purchased in 2008, then sold the house at a loss a year later. Do I still need to repay the IRS for the $7,500 credit?
Maybe not. The 2008 first-time home-buyer tax credit was actually an interest-free loan that must be repaid in $500 increments over 15 years, starting with your 2010 return. If you sell your house within 15 years – before you finish repaying the tax credit – then you generally must repay the balance of the credit in a lump when you file your taxes for the year you sell the house.
But there is an exception for home-sale losses. You only have to repay the credit up to the amount of gain, if any, on the sale. The worksheet with the instructions for IRS form 5405 can help you calculate your gain or loss. You must subtract the remaining credit from your basis to determine whether you actually have a loss.
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.
-
Could a Golden Visa Be Your Ticket to Retiring Abroad?Trump and DOGE are weighing a U.S. "Gold Card" that would let the wealthy emigrate to the U.S. for a fee. But golden visas have been around for years worldwide. Here's how they work.
-
Running Out of Money in Retirement: Nine Steps to Reduce the RiskQuit worrying about money and enjoy a carefree retirement. Sounds good, right? Well, if you follow these nine steps from a financial adviser, you could be on your way to that goal.
-
Big Tax Deduction Increase Proposed for Those Over Age 65Tax Deductions A new bipartisan bill could mean bigger retirement tax savings to offset taxes on Social Security and high prices.
-
New HSA Contribution Limits Are Set for 2026: What to Know NowHealth Savings The IRS says Health Savings Account contribution limits will increase again next year due to inflation.
-
Retirees: Don’t Miss These Valuable State Tax Breaks in 2025Retirement Planning Selecting the right state for retirement can significantly impact your financial well-being.
-
Trump’s Tax Cut Risks Your SNAP, Medicaid BenefitsTax Cuts The GOP budget blueprint could slash lifesaving programs for millions of U.S. households.
-
Missed Tax Day? Nearly One Million Taxpayers Still Can File and Claim Valuable Tax RefundsTax Refunds As many as one million taxpayers could be missing out on a significant tax refund.
-
Which Generation Pays the Most Tax in the US?Tax Burden Polls show that most people feel like taxes are unfair. But which age group bears the brunt of the tax burden in the United States?
-
How the Trump Harvard Tax-Exempt Threat Could Impact YouTax Law Trump's latest higher education showdown raises fundamental questions that could reach beyond Harvard's nonprofit tax status.
-
Tax Day 2025: Don’t Miss These Freebies, Food Deals and DiscountsTax Day You can score some sweet deals on April 15 in some select restaurants like Burger King, Shake Shack, and more.
