Today TaxMama® hears from Dave in the TaxQuips Forum, with an excellent question (let me summarize). “His friend’s daughter bought a home in 2008 subject to the First Time Homebuyer Credit repayment. During 2011, she was deployed to Iraq for 11 months. Can she file an amended return and have the entire balance of her repayment waived, since she qualifies for the special military exception?”
At first, I didn’t think so. But you and Bill Porter, our Tax Pro from Minnesota, made me take a second look at the law.
Rule for the Military and Certain Other Federal Employees
In many cases, the credit repayment (recapture) requirement is waived for members of the uniformed services, members of the Foreign Service and employees of the intelligence community.
This relief applies where a home is sold or stops being the taxpayer’s principal residence after Dec. 31, 2008, in connection with government orders received by the individual (or the individual’s spouse) for qualified official extended duty service. The credit is still allowable even if this happens during the year of purchase. Qualified official extended duty is any period of extended duty while serving at a place of duty at least 50 miles away from the taxpayer’s principal residence (whether inside or outside the U.S.) or while residing under government orders in government quarters. Extended duty is defined as any period of duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period.
Apparently – more than 90 days of extended duty qualifies your friend’s daughter to waive the repayment. It’s good to know there ARE some benefits for serving your country!
And remember, you can find answers to all kinds of questions about the homebuyers credit, military taxes, and other tax and business issues, free. Where? Where else? At www.TaxMama.com.[Note: If you were subscribed to the e-mailed version of TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]
Please post all Comments and Replies in the new TaxQuips Forum .