In 2008, a taxpayer claimed a $7,500 first-time homebuyer credit and continues to live in the home. Which of the following statements is correct?
a. Correct. The taxpayer must report $500 ($7,500 ÷ 15 years) as recapture (additional tax) on his or her 2011 tax return.
b. Incorrect. The ability to avoid recapture applies only if the home was purchased after 2008.
c. Incorrect. A taxpayer who purchased a home after 2008 is not subject to recapture as long as he or she stays in the home for 36 months, a period that was completed in 2011. This rule does not apply to homes bought in 2008.
d. Incorrect. While the repayment period runs for 15 years, it must be repaid ratably over this period. A taxpayer cannot wait 15 years to repay the tax credit.
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