What happens to the first-time homebuyer’s tax credit in a foreclosure?

Get Legal Help Today

 Secured with SHA-256 Encryption

What happens to the first-time homebuyer’s tax credit in a foreclosure?

My wife and I purchased a home in the summer of 2008. We filed our taxes and received the first-time home buyers tax credit (about $7,500). In 05/09 we left that home because we could not afford it anymore. I believe the house went into foreclosure. I am not sure as to what happened. In 06/10, my wife left me and we are now separated and going through a divorce. I am wondering what happens with the tax credit because I think it is due back. I have no idea what happened with the house and I have no idea what my wife is doing because we are not communicating.

Asked on April 17, 2011 under Real Estate Law, Florida

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Well, you absolutely need to find out if the home went into foreclosure, if it was foreclosed upon, how it is reported on all of your credit reports (Experian, Trans Union, Equifax and Innovis) and you need to find out if your state is a deficiency state or anti deficiency state. If the home went into foreclosure, did your lender sell it for what was owed on it so there wasn't a deficiency or is there money owed? If there is money owed, does it show up on your credit report as any sort of collections matter. Further, if the money is owed back to you in terms of the tax credit, you need to find out if your wife obtained it or if you can still amend your tax filings to try to obtain the credit. If you do obtain the credit, I believe you may need to split the amount with your wife. If you are represented by divorce counsel, talk to your counsel about this matter.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption