Are you a first-time homebuyer who has benefited from a mortgage credit certificate program? Understanding and completing Form 8828 is crucial to ensure you are accurately reporting your federal mortgage subsidy. With Fill’s free editable template, you can navigate the complexities of this form seamlessly.
Form 8828, or the recapture of federal mortgage subsidy, is filed by taxpayers who have sold or otherwise disposed of their federally subsidized home within the first nine (9) years of ownership. The recapture tax is imposed to repay a portion of the mortgage subsidy, and can be quite confusing. Fill’s template simplifies the process, ensuring you accurately report your recapture tax.
The primary purpose of Form 8828 is to report and calculate the recapture tax when a taxpayer sells or otherwise disposes of a home purchased via a type of federal subsidy within the first nine years of ownership. This tax is imposed to repay the federal mortgage subsidy, which is a benefit provided to homebuyers through tax-exempt bond financing or a mortgage credit certificate program.
Recapture tax is calculated based on a taxpayer’s adjusted qualifying income, the holding period percentage, and the maximum recapture amount. The tax applies only if the borrower’s income exceeds the adjusted qualifying income threshold for their family size, as the Internal Revenue Service (IRS) specified.
To determine the holding period percentage, the number of years the home was owned is taken into account. The percentage increases as the number of years of ownership increases, with a maximum of 50% in the ninth year.
Accurate reporting of your recapture tax is essential, as any discrepancies could result in penalties and additional interest. Completing Form 8828 ensures that you comply with federal income tax requirements and helps avoid potential complications with the IRS.
You need to file Form 8828 if you meet the following criteria:
There are certain situations in which you are not required to file Form 8828:
Mistakes on Form 8828 can result in penalties and additional interest. Fill’s template helps you avoid errors by guiding you through each step, minimizing the risk of costly mistakes.
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