All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

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Pioneer
Posts: 2
Registered: ‎05-09-2017
Accepted Solution

2008 first time homebuyer repayment - filing married separate on 2016 tax return

I need help here.  In 2008 me and my husband applied for the First Time Home owner program.  Our original credit amount was $2150.00 so our annual payments are $143.00.  Up until 2015 tax year we filed married joint and entered the repayment credit of $143.00 on every tax return.

 

For the tax year of 2016 my husband and I are filing married separate, and my question, do I enter half of the $143 which would be $71.50 round up to $72.00 as my portion of my the repayment fee.  My soon to be ex is yelling at me and telling me that I have to claim the  entire $143.00 on my tax return.

 

I tried calling the IRS and their automatic phone messaging says no one is there to answer the calls because its after the tax season.  Information can be found on their website.  When I try to search the IRS website, it only covers if the spouse dies then only half of the repayment can be claimed.  We both are still alive and filing married separate.

 

Can someone please help out here. I would greatly appreciate it.

 

Thank you

Tax Pro
Posts: 5,275
Registered: ‎02-23-2016

Re: 2008 first time homebuyer repayment - filing married separate on 2016 tax return

Hi Taxhelp911,

 

Welcome to the H&R Block community.

 

When you have a first-time homebuyer credit that you applied for jointly and you end up separating then it depends on who maintains ownership of the house.  Did you both still own & live in the house last year or was only one of you still living in the house?  Are you both still living in the house?

 

 

Generally:

 

  • If the house ceased to be the primary residence of one spouse and was transferred to the other spouse then the spouse who still lives in and owns the house is responsible for 100% of the first-time homebuyer credit repayment from that point on.
  • If the house ceased to be the primary residence of both spouses then repayment is accelerated and the entire credit must be repaid.
  • The credit is only forgiven with no repayment required in the event of death or in the event that you involuntarily vacated the home.

 

Once you've gotten back to me with the answers to those couple of questions that I asked I will be able to give you a more detailed and informed answer.

 

Louis,

Senior Tax Advisor (Tampa, FL)

Pioneer
Posts: 2
Registered: ‎05-09-2017

Re: 2008 first time homebuyer repayment - filing married separate on 2016 tax return

Hi LouisH,

Thank you so much for answering my post.

 

I moved out our house August 2016 while my husband still lived there.  He filed married separate without me knowing what he was doing until after the fact.  So now I am scrambling trying to file my tax return.  I filed my return married separate electronically but it was rejected due to the first time repayment.  So now I am trying to figure things out.

 

I hope this helps you.

 

1. I moved ou / forced outt August 2016.  He continued to live there.  As of 2017 the house will be put for sale.  I know its not relevant for my 2016 situation. 

2. I would say I am still owner in the house but moved out/ forced out in  August 2016 due to my husband saying he doesn't love me and started dating another women.  We have filed for divorce in 2016 and its still on-going.

 

In regards to the point 3 - credit is only forgiven in the event of involuntarily vacated the home.  Husband said he wanted a divorce and has been dating another women.  Does this qualify me? I want to do whats right.

 

Thank you

 

Tax Pro
Posts: 5,275
Registered: ‎02-23-2016

Re: 2008 first time homebuyer repayment - filing married separate on 2016 tax return

Hi Taxhelp911,

 

You're quite welcome.

 

So with your situation you lived in the home for more than half of the year so it was your primary residence for 2016, and the house has not been sold or officially transferred to your spouse in a divorce proceeding yet, so you'll have a repayment of the first-time homebuyer credit on this tax return.  The good news is that because you had to leave the house and find a new place of your own due to your divorce situation your repayment will not be accelerated so you'll only have to repay the normal amount this year instead of repaying the entire credit.  2008 purchases are a little bit different than other years in that there are less exceptions, and the exception for involuntary conversions relieves you from accelerated repayment instead of from relieving you of repayment altogether.

 

If you and your spouse applied jointly for the credit then you are each responsible for 1/2 of the required repayment since you filed separate returns.  However, if only you applied for the credit then you must repay the entire amount of the required annual payment for 2016.

 

There is some additional good news as well.  If the house is transferred to your spouse as part of your divorce agreement or when it is sold you may be completely off the hook for repaying the homebuyer credit.  In the event of an official transfer of the home to your spouse he would assume responsibility for the entire remaining balance and you will owe nothing.  In the event of the sale of the home you only have to repay the credit up to the amount of gain on the sale, so if you don't realize any capital gain on the house then you won't have to repay any of the remaining balance of the credit.

 

Louis