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Which country introduced income tax first?

Do I have to refund the $8000 first time homeowners tax credit if I KEEP the house & move to another country?

  • I bought my house Feb 2009 and got the first time homeowners tax credit of $8000 for it. If I move to another country in 2011 for 2 years, but still keep the house, can I keep the tax credit? I would like to claim for foreign income exclusion (form 2555) by establishing residence in the foreign country (renting). Thanks.

  • Answer:

    What you would like is to have your cake and eat it also.(excuse the old saying). You are treading in dangerous waters trying to do both of these. There could be circumstances in which that would be possible but you should consult with a very knowledgeable tax professional before you undertake this approach to the FTHBC and form 2555 exclusion. Generally the FTHBC must be repaid if the home ceases to be your primary home within the first 36 months after the purchase. Also the rules for the foreign income exclusion are not as simple as you may think.*

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Other answers

You can't have 2 personal residences. When you live and work in the foreign country, you will lose your residence in the USA, even if you don't rent it out. Failure to live in the house the full 36 months after purchase means you need to repay the $8000,

Quick Answers

You'd have to repay it. The deal was that you had to live in it as your main home for the next three years.

Judy

Temporary absences from home won't affect the credit. The IRS definition of temporary is generally a period of time that is expected to last LESS than one year AND that in fact lasts less than one year. This allows you to make a presumption of temporary up front, but at the end you have to look back and see if it still was less than one year. If you took a temporary work assignment and did not rent out the home you'd probably be safe. However if you run one day past one year or rent it out, you will have to pay back the credit.

Bostonian In MO

Sorry, but you will have to repay the credit if your home ceases to be your primary place of residence. If you are not going to live there for two years, obviously it will not be your primary place of residence.

card-ron

No, b/c then the home will not be your primary residence.

Pascal the Gambler

it would no longer be your primary residence, of course you repay it

tro

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