My soon to be ex-husband bought our first home this past April. Only his name is on the mortgage, but we both got the full credit ($4,000 each for a total of $8,000). We are now getting a divorce and I wasnt sure if I would have to pay my half of the credit back.
After some research, I did find out that yes… whoever moves out of the home has to repay their portion (half) of the first time homebuyer tax credit. However, I also found out that if I legally transfer my rights to the home to my ex within the divorce decree, then that transfers full responsibillity of the tax credit to my ex. Meaning that he becomes responsible for repayment of the full $8k should he move out of the home, sell, or foreclose. As long as I legally transfer all my rights regarding the property to my ex-husband, then I am off the hook. But it has to be legal and included in the divorce decree.
I figured there is probably someone out there in the same awful situation and could use some advice. I obtained that information from the IRS and also my divorce lawyer.
Thank you. Was looking for this. My brother and his divorce, same sad boat. He moved out before the divorce decree, which won’t be final until next month. I hope moving out (which saved his mental life) doesn’t hurt him in this stupid credit.
Hi Sarah,
I am still in the middle of negotiations for my divorce. I have not heard anything from the IRS. However, I am hoping we get the final divorce decree before the deadline to file 2010 taxes. I am really paranoid about filing under my new address which is now an apartment. Sorry, but I don’t have any additional information just yet.
Good luck to your brother. I will post more as soon as I know something.
I am in the same situation. I’m Sarah and my soon to be ex is Jason. We bought a home together before we married. Purchased it in May 2009. I amended my 2008 taxes so we could received the credit to have money for closing. Sept 2009 we married and April 2011 I filed for divorce. I’m the one that moved out and will be signing a quit claim deed and Jason willl have full responsibility of the home. I just filed my 2010 taxes, with my new address of course, and they were rejected stating repayment of credit is needed. I’m currently trying to find out the details of this. It is completely unfair!!! I walked away with nothing but my clothes and still have to repay this alone. If anyone has any advice please share, or any contact numbers regarding repayment during a divorce that would be great.
Thanks
SArah
I completely understand and it really is NOT fair. I was told by several people from the IRS that signing my interest and right to the home over to him will make him responsible for the full amount of the refund. So that if he sells or moves prior to the repayment expiration, he has to pay it… not me. But, I am worried about what you are experiencing… moving and filing taxes before you have transferred the rights over to him. I was afraid that if I file my taxes before the divorce is over, with my new address, that they would pin the tax debt on me. I have been holding off on filing my taxes because of that. I don’t even want to get into that mess with them. If I were you, I would try to find out if they can put a hold on collection based on the fact that you are in the middle of a divorce and that he will be taking full responsibility for the home and first time home buyer credit repayment.
My divorce is taking some time because he is trying to fight me on spousal support. The tax deadline is approaching. I’m not sure what I will do if this drags on past that date. I might have to suck it up and pay the penalty for late filing. Ugh.
I wish you luck! If you learn anything new, please share with me and my readers. I get a lot of traffic on this website for this topic. It seems we are not alone in this situation.
I am also going through the same situation. My husband and I bought our house in Nov 2009 and received the full $8K in homebuyer credit. I am now in the process for filing my divorce and have a court date set for this friday to finalize it!!! Now that I have read these posts…I am considering rescheduling my court date. I moved out of the house a few months ago but don’t want to be responsible for paying the $4k since he plans to refinance the house in his name (but this just hasn’t happened yet). Don’t know what to do and can’t seem to find much info about this situation!
I found some information on http://www.irs.gov that I think will be helpful to many of you! There is a section for divorced persons. Best of luck!
http://www.irs.gov/newsroom/article/0,,id=206293,00.html
Mariam,
Thanks so much for that information! I found it VERY useful and reassuring!
So if I am understanding everything correctly… if I can get in the final divorce decree that I am transferring all rights and interest in the home to my husband (with the exception of my half of the equity), and then he sells the house after the divorce is final, repayment of the first time home buyer credit should be all his responsibility. I hope that’s right!!
I think if you claim your half of the equity, you are not really fulfilling a quit claim and you will be responsible for your half of the refund.
Here is what it says:
Divorced Persons
If you (transferor spouse) transfer your main home to a spouse or former spouse (transferee spouse) under a divorce decree, the transferee spouse who keeps the home is responsible for repayment of the entire credit if, during the 36-month period after the purchase of the home, the home ceases to be his or her main home. You (transferor spouse) are not responsible for any repayment of the credit. (1/6/11)
Jean,
I don’t think your understanding is correct. I could be wrong, but I’m pretty confident… Look at it this way, would it be fair if every time someone filed for divorce… one spouse keeps the home AND ALL of the equity? That wouldn’t make any sense. Then one spouse walks away with absolutely nothing even though they may have invested their own money in that home. It’s pretty standard procedure for the spouse taking the home to pay the other spouse their portion of the equity in the home because of that spouse’s prior investments in the home.
In this case with the tax credit, it would not be fair to make the leaving spouse responsible for repayment of a credit that most likely was invested in the home that the other spouse is keeping. For example: If I had to pay my half of the $4k back, and I don’t take my half of the equity, and he keeps the home… he could turn around and sell the home after the divorce, only have to pay his $4k, AND he would get to keep ALL of the equity from the sale. Meanwhile, I get ripped off. It’s a tricky situation really. I think the key factor in deciding how to handle this is whether or not the spouse keeping the home plans to sell it or keep it until the repayment period is over. If my husband knew for a fact he was going to sell the home prior to the expiration of the repayment period, we probably would have done things a bit differently.
My ex and I bought our first house in December 2008. We separated in 2009 and the divorce wasnt final until Sept of 2010. Even though as part of our divorce decree, I deed him the house and turned over all interest in the property, I still had to pay the first 500 payment in January of 2011 as part of my 2010 tax return, becuase we were still “married” for most of that year. This tax year I was all giddy, that I didnt have to pay the payment anymore, since i havent lived in the house since 2008 and its been over a full year since the divorce was final. I JUST checked the status of my refund and it has been adjusted, -500, for first time home buyer credit tax repayment. I have been on the phone waiting to speak with someone in “that department” of the IRS for 1.5 hours now…hoping to hear something good soon!
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I have a question: MY husband and I received the homebuyer credit in 2008 of 7500 . They have split it between us both (3,750 each) . We split at the end of 2011 and he has not lived in the home at ALL in 2012 BUT our divorce decree will not be final until probably March 2013. I am using Turbo Tax to file our taxes; he’s filing single and iif you check the box that you have not lived in the home, it gives you some options to choose from as to why has your living situation changed. Can he go ahead and check “transferred to spouse during divorce” this year even though the actual transfer didn’t get done in 2012??? If he doesnt’ choose that option and just says its not his main home anymore it is asking for him to repay it all in full which is not fair to him. I will continue to live in the home so i probably should take over the repayment …..it would have been easier if everything was final in 2012 but it was not. Any suggestions?
I know one of the symptoms typical of addiction, alcoholism, depression, or other physiological condition is to be up all night and to sleep most of the day Why is this?
My boyfriend and his ex-wife bought a home in 2008 and she filed for divorce in 2011. At that time they agreed to sell the home, she did not include anything about the home in the divorce decree. She later decided she wanted to keep the home and pay him his share of the equity, so he signed off on the home, however she failed to pay him anything. He was unaware that any of the credit would be his responsibility since he forfeited the home to her. This year, 2013, he filed his taxes and has actually already received his return, then yesterday got a letter from the IRS saying he didn’t claim it and has to pay. Its my understanding, from earlier posts, that since it was never on the divorce decree that he will have to pay his half even though she and her boyfriend live in the home and my boyfriend never received any money from the transfer? If this is so, should he take her to court for the money owed him? Suggestions?
So what if the home is not specifically addressed in the divorce papers. The boys was purchased August 2008. Marriage
I need help. The home was purchased August 2008, solely in Kevin’s name. Amy and Kevin marry December 2008 and file their 2008 taxes jointly and earn the first-time homebuyer’s credit together. Kevin and Amy’s divorce is final in April of 2011. Divorce papers don’t specifically address homeowner’s credit or who gets the house for the simple fact that Amy was never on the deed, she simply ‘benifited’ from the credit because she filed jointly with Kevin. Kevin keeps the home, Amy moves out and gets hit with full repayment on her 2012 taxes. I don’t think this is right.am I SOL bc it’s not addressed specifically in the papers? How can I get the money back? Why am I paying for a home I haven’t seen since 2010?
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