Repayment of Home Buyer Credit

The Internal Revenue Service is continuing to enforce repayments of the home buyer credit. It will review real estate databases for sales of homes for which the credit was taken. Generally, the credit is recaptured if the home is sold within three years for homes bought after 2008 and within 15 years for residences that were bought before 2009.

The IRS is scouring its records to make sure it has an accurate list of filers who bought in 2008. They are required to pay back the $7,500 tax break, evenly, over 15 years, which started in 2010. Thus, they'll report a $500 tax bill on their Form 1040.

Treasury inspectors found that 60,000 people who took the credit for homes bought in 2009 are wrongfully classified in the service's files as 2008 buyers. This way, IRS hopes to be able to head off erroneous notices on the 15-year repayment rule.