Boise Divorce Lawyers - Boise Family Law Attorneys - Idaho Custody Attorney - Child Support Lawyer - Stimulus Dollars

Boise Divorce Lawyers - Boise Family Law Attorneys - Divorce, Custody, Child Support, visitation, Modification, Adoption and Termination, call for your free consultation (208) 472-2384 or visit www.divorceboiseid.com

Boise Divorce Lawyers are getting quite a few calls concerning the Obama Stimulus Dollars for first time home owners.  Why are divorce attorneys getting these calls?  Because, if you got the $8,000 credit to buy your first home you have to hold onto that home for three years before you sell it and if you don't you have to pay back the credit.

What happens when you got the credit and now, less than 36 months later you are getting a divorce?  Sadly, you have to pay it back.  Who pays the credit pursuant to divorce and how much?

The law concerning pay back of the credit upon divorce is governed by the IRS.  Here's how it works.

The credit is considered to belong to both of you so you each have to pay back half if the house is sold.  You may not owe the entire amount, or anything for that matter, if the profit of the home is less than the $8,000.  If you only make a $3,000 profit on the sale of your home then you each only owe $1,500.  The amount you owe is paid back as an additional tax on your 1040.  In addition you must file IRS Form 5404.

If you are divorced before the 3 year period but the home is transferred to one spouse as part of the divorce settlement, the credit then becomes the responsibility of the party taking the home.  If they sell the house before the 3 year period has expired they owe the entire amount.  So, for example, if they sell the home and make a $5,000 profit then repayment of that $5,000 is their responsibility.  If they hold onto the home for the remainder of the 3 year period, then there is no repayment required (unless the home was purchased in 2008 and under 2008 law they, or anyone who bought a house is required to begin paying back the credit over a 15 year period beginning in 2011).

Another question divorce lawyers are getting is, what if we get a divorce but the house doesn't sell until after the 3 year period.  The repayment kicks in upon sale of the house, not upon divorce, so nothing would be owing.

Boise Divorce Attorneys know that the IRS is complex and so the laws effecting the tax credit don't stop there.  It is possible that even if a couple who gets a divorce and is forced to sell before the 3 year period is up to avoid repaying the credit at all.  If, within two years, you purchase a new home you may be exempt from paying back the credit.  Again, Boise Divorce Lawyers know it still doesn't stop there.  There are all sorts of other rules and laws effecting the tax credit like condemnation, foreclosure and death - we are after all dealing with the IRS!

If you are seeking a divorce and need to speak to a Boise Divorce Attorney please cal (208) 472-2384.  One of our lawyers will be happy to speak with you.