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IRS.gov Website
Publication 523
taxmap/pubs/p523-009.htm#en_us_publink1000266744

Recapture of First-Time Homebuyer Credit(p28)

For Use in Tax Year 2013
rule
taxmap/pubs/p523-009.htm#en_us_publink1000267527

Recapture of 2008 first-time homebuyer credit.(p28)

For Use in Tax Year 2013
rule
If you claimed the first-time homebuyer credit for a home you purchased in 2008, you may have to recapture all or a portion of the amount you claimed. For a home purchased in 2008, you must repay the first-time homebuyer credit over a period of 15 years, starting in 2010. If your home ceases to be your main home before the end of the 15-year period, you generally must include all remaining annual installments as additional tax on the tax return for that year. Your home ceases to be your main home if you sell the home, convert the home to business or rental property use, or the home is destroyed, condemned, or disposed of under the threat of condemnation. In the event of a sale or other conversion you will need to file Form 5405 with your tax return. In the case of the sale of the principal residence to a person who is not related to the taxpayer, the recapture does not exceed the amount of gain, if any, on that sale. Solely for purposes of figuring this gain limitation, reduce the basis by the amount of the credit that has not been repaid.
taxmap/pubs/p523-009.htm#en_us_publink1000240728
Example.(p28)
Dan and Pat purchased a home in 2008 for $200,000 and received a first-time homebuyer credit of $7,500. They repaid a total of $1,500 as an additional tax on their 2010, 2011, and 2012 returns ($500, or 1/15th of $7,500, for each of 2010, 2011, and 2012). They sold the home in 2013 to an unrelated person for $195,000. Because they sold their home in 2013, they must repay the balance of the credit on their 2013 return. However, since they sold the home to an unrelated person, the amount they must repay is limited to the gain on the sale. In order to calculate the gain they must reduce the adjusted basis of the home by the amount of the credit they have not yet repaid. The amount of the credit they have not yet repaid is $6,000 ($7,500 − $1,500). Thus, they must reduce their basis in the home to $194,000 ($200,000 − $6,000). Therefore, the gain (for purposes of limiting the amount of credit they must repay on their 2013 return) is $1,000 ($195,000 − $194,000). They must report the $1,000 as an additional tax on their 2013 return(s).
EIC
Adjusted basis is reduced by the amount of the unrecaptured first-time homebuyer credit only for purposes of figuring how much of the credit must be recaptured. Do not use this basis for figuring gain or for reporting basis or gain on Schedule D (Form 1040) or Form 8949.
taxmap/pubs/p523-009.htm#en_us_publink10002721

Recapture of the post-2008 first-time homebuyer credit.(p28)

For Use in Tax Year 2013
rule
If you claimed the first-time homebuyer credit for a home you purchased after 2008, the credit is not required to be repaid unless your home ceases to be your main home within 36 months of the date of purchase. See the Instructions for Form 5405 for additional information.
taxmap/pubs/p523-009.htm#en_us_publink1000240729

Exceptions.(p28)

For Use in Tax Year 2013
rule
If one of the following applies, you may not have to recapture the first-time homebuyer credit.
Deposit
For details, see Form 5405 and its instructions.
For more information and assistance, see IRS.gov and click on "Tools" to access the "First-Time Homebuyer Credit Account Look-up" tool.