Q: I work for a company that is very close to offering me a significant promotion. However my wife and I bought our first home in March of 2010, and received the $8,000 tax credit that it came along with. I was fully aware that when we received the credit we had to stay in our home for a minimum of three years, which was my full intention. But because of recent developments this may not be an option anymore. I don?t have anywhere near 8 grand to pay back to the government, so I am just wondering if there are any out clauses that say I can get out of paying back the credit if my employer is requiring me to move. By not accepting this promotion I will be setting back my career by at least two or three years, and it could mean me having to look for another job. I don?t see how the IRS can hold something like that over my head, especially since I have no control over the situation.
?Silas, Park City, KS
A: You need to talk to a tax professional or tax attorney.
One thought: Will your company pay the $8000 as a moving/relo expense if the tax professional says it has to be paid back?
Teri Andrews Murch is a Realtor? with Lyon Real Estate in Auburn, CA.
A: One of the requirements of getting the 2009 ? 2010 Homebuyer Tax Credit is that you have to maintain the home as a primary residence for 36 months. So if you move out ? even if you still own the property ? you?ll have to repay the credit. Additionally, if you sell the home you have to pay back the credit. The good news is that you only have to repay up to the home?s gain, so you may not have to repay the entire credit. There are some exceptions to the requirement to repay the credit immediately on your next tax return:
? If the spouse of a deceased homeowner continues to live in the house. If the spouse sells the home, though, before the time is up he or she must repay half the credit.
? Spouse remains in home to finish the 36 months after a divorce.
? Military or other personnel required to move more than 50 miles away.
? If your home is involuntarily damaged and you are forced to move. However, you have to buy a new home within two years.
Other than the above exceptions, there is no way I know of to avoid repayment of the tax credit.
Lee Dworshak is a Realtor? with Keller Williams LA Harbor Realty in Rancho Palos Verdes, CA.
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