Foreclosure(anonymous thread)
My wife and I purchased a home in the Summer of 2008. We filed our taxes and received the first time home buyers tax credit, which was $7,500 I think. In May 2009 we left that home because we could not afford it anymore. I believe the house went into foreclosure. I am still not sure as to what happened.
In June 2010, My wife left me and we are now separated and going through the divorce process.
I am wondering what happens with the tax credit because I think it is due back. I have no idea what happened with the house and I have no idea what my wife is doing because we are not communicating in reference to that anymore. I believe she could be filing for bankruptcy but I don’t know.
I filed my taxes in March (for this yr and I know my wife filed too) but the IRS.gov website is saying they are processing MY return and will contact me but I have not received anything from them.
What can/should I do about this?
Thanks for any help anyone can offer
I would wait for the IRS to process your return and tell you weather you owe $$$ or not.
Did you bring up this possible debt in the divorce proceeding?
I would wait until someone tells you that you owe, no sense chasing someone down in order to pay a bill that they haven’t even taken the time to tell you about. Then if they are to get the whole thing out of you, go back to court and get an amendment in the divorce judgment, making her pay half.
I wouldn’t do a damn thing until someone tells me that I need to pay. I mean, they have to try to collect before they can add on interest charges, right?
I wouldn’t bother but if your really worried call the real estate agent that you had purchased the house from, tell them that you lost the place in a foreclosure, (you moved out before the bank sent you notices of foreclosure? It is strange that you do not know what happened.) Don’t tell the agent that you don’t know what happened, unless he beats it out of you. Tell him or her that it was a foreclosure and you want to know if you are going to need to pay the $7,500.00 back.
Like I say, I wouldn’t bother to do that. Wait until they tell you that you owe.
1. Get a lawyer. S/he will know the answers to this and all the other questions you’re going to have.
And if you’re thinking you can’t afford one, think again. I mean, how can you NOT afford one when potentially tens of thousands of dollars in bills and rebates hang in the balance, and you could get fucked on both ends if you’re not protected?
the $7,500 tax credit was not a credit…it was an interest free loan paid back on your tax return for the next 10 (i think) years. so you get the initial $7,500 credit when you file, but the next 10 years you pay it back.
but yeah…get a lawyer
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the $7,500 tax credit was not a credit…it was an interest free loan paid back on your tax return for the next 10 (i think) years. so you get the initial $7,500 credit when you file, but the next 10 years you pay it back.
but yeah…get a lawyer |
I’ve never heard of that before…
That is because Obama changed it.
The last year of Bush’s presidency he authorized the $7500 0% interest LOAN.
It was only available for first time buyers and the house MUST be your primary residence.
Starting this year you owe $500/year until it is paid off.
If you vacate, sell or it otherwise is no longer your primary residence you owe the balance.
Like I said Obama changed it. What he did was let it expire (it was only valid for 2008) and started a new program where first time buyers got a tax credit for $8000.
The credit is just that, a credit. You don’t pay it back.
Now you can look at it like the class of 2008 got screwed, but I challenge you – who is going to give you a zero interest loan and allow you 15 years to pay it back?
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1. Get a lawyer. S/he will know the answers to this and all the other questions you’re going to have.
And if you’re thinking you can’t afford one, think again. I mean, how can you NOT afford one when potentially tens of thousands of dollars in bills and rebates hang in the balance, and you could get fucked on both ends if you’re not protected? |
If only one of you gets a lawyer then the one without is going to get really, really screwed.
Here I will help you out, right now – this second – all her friends are telling her to get a lawyer.
The caveat on this one was that you had to own the home for at least 3 years, or it to has to be paid back. There are possible exceptions, including divorce, so I decided to look up the 2008 review and exceptions:
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However, some exceptions apply to the repayment rule. They include: If you die, any remaining annual installments are not due. If you filed a joint return and then you die, your surviving spouse would be required to repay his or her half of the remaining repayment amount. If you stop using the home as your main home, all remaining annual installments become due on the return for the year that happens. This includes situations where the main home becomes a vacation home or is converted to business or rental property. There are special rules for involuntary conversions. Taxpayers are urged to consult a professional to determine the tax consequences of an involuntary conversion. If you sell your home, all remaining annual installments become due on the return for the year of sale. The repayment is limited to the amount of gain on the sale, if the home is sold to an unrelated taxpayer. If there is no gain or if there is a loss on the sale, the remaining annual installments may be reduced or even eliminated. Taxpayers are urged to consult a professional to determine the tax consequences of a sale. If you transfer your home to your spouse, or, as part of a divorce settlement, to your former spouse, that person is responsible for making all subsequent installment payments. |
You are supposed to live in your home for at least 3 years otherwise you are supposed to pay it back. Not sure if you would still owe it if you ran into financial troubles though.
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