Do I have to repay the $8000 tax credit if I sell my home?  If you purchased the home in 2009 or 2010 and sell it within a 36 month period from the date of purchase, then you must repay the credit.   You must also repay the credit if you convert the home to a business or rental property or the lender forecloses on the home.  The credit is repaid by including the amount of the credit as additional tax on the tax return for the year in which the repayment event occurs.  If the home was purchased in 2008, a different rule will apply.  First time homebuyers who purchased new homes in 2008, were eligible for a maximum credit of $7,500.  The credit must be repaid over a 15-year period unlike those who purchase in 2009 or 2010.  Click here for more information. 

Following are the exceptions to the repayment rule:

• If the homeowner dies, any remaining annual installments are not due. In the event a joint return was filed, 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. Click here for more information.

You should consult a tax professional with your specific situation.