If your home was financed with a federally subsidized loan, you should have received notification in writing from the bond
issuer or the lender at the time your mortgage was provided. The notification should state that your home was financed with
a mortgage loan from the proceeds of a tax-exempt bond or that you received a mortgage credit certificate with your mortgage
loan. The notification should include information needed to figure your recapture tax and it should advise you to keep it
for your records.
Part I—Description of Home Subject to Federally Subsidized Debt
List the address of the property that was subject to the federally subsidized debt, not your current address as shown
on your Form 1040.
Check the applicable box on line 2 from the information on the notification given to you at the time you took out
Fill in the requested information from the notification discussed above. If you have a problem identifying the issuer,
contact your lender and ask for the information.
Fill in the name and address of the bank or other lender that provided your original mortgage.
Fill in the month, day, and year that your original federally subsidized mortgage loan was provided. This generally
is the date of settlement on your home. However, if the loan became federally subsidized debt at a later date, use that date
Fill in the applicable month, day, and year. The settlement or closing date generally is the date of sale. However,
Form 8828 also applies to certain other dispositions of your home. For instance, the date to enter on line 6 may be the date
you deeded the property to a relative (see Giving away your home
under Special Rules
on page 1).
Enter the date the original federally subsidized loan was fully repaid. (This may be the same as the date of sale
or other disposition on line 6.) A refinanced QMB loan is fully repaid on the date of its refinancing (with conventional financing).
However, a refinanced MCC loan that met all the conditions specified earlier under Refinancing your home
is considered an extension of the original MCC loan. Do not enter the refinancing date for such an MCC on line 8. See Refinancing your home
and the instructions for line 20.
Part II—Computation of Recapture Tax
You must report all required information for your interest in the home. This may be less than 100% if someone else also has
an interest in the home (see Special Rules on page 1).
This item applies to both sales and other dispositions (see Giving away your home
under Special Rules
on page 1). If your home was disposed of other than by sale, the sales price is the fair market value of the home at the time
of the disposition. You should report only the part of the sales price representing your interest in the home (see Two or more owners
and Qualifying subordinate mortgage loan (or grant)
under Special Rules
on page 1).
Include sales commissions, advertising, legal fees, etc., allocable to your interest in the home.
In general, the adjusted basis of your interest in the home is your share of the cost of the property plus purchase
commissions and improvements, minus depreciation. Do not reduce the adjusted basis for any gain that you did not recognize
on the sale of a previous home.
If you received your home, or interest in a home, incident to a divorce, your adjusted basis is generally the same
as that of your spouse (or former spouse).
For details on how to determine your adjusted basis, get Pub. 551, Basis of Assets.
” on the dotted line to the left of the line 13 entry space if you sold your home at a gain within the 9-year recapture period
and paid a share of that gain to the QSML governmental lender. In the amount column for line 13, enter your share of the gain.
Attach a worksheet to your Form 8828 to explain how you calculated your share of the gain. Show the date you paid the QSML
governmental lender its share of the gain and the amount of that share. See Qualifying subordinate mortgage loan (or grant)
on page 1.
Figure your modified adjusted gross income as follows:
Begin with: Your adjusted gross income as shown on your Form 1040.
Add: Any tax-exempt interest that you received or accrued for the tax year.
Subtract: Any gain included in your gross income because of the disposition of your home.
If your home was financed with a federally subsidized loan, you should have received notification in writing from
the bond issuer or the lender at the time your mortgage was provided. The notification contains a table which lists adjusted
qualifying income figures. Your adjusted qualifying income is found in the column of the table that corresponds to your family
size (number of family members living with you at the time of the sale) on the line that corresponds to the number of full
and partial years that you held your home.
The federally subsidized amount should be found on the notification you received from the bond issuer or from your
lender. It is equal to 6.25% of the highest amount of the loan that was federally subsidized. Enter the figure on line 19.
You will find your holding period percentage on the same line of the table from which you obtained your adjusted qualifying
income (see line 16 instructions). However, if you fully repaid the federally subsidized loan within 4 years of the closing
date of the loan, and before selling or otherwise disposing of your home, you will need to use the worksheet on page 3 to
redetermine your holding period percentage for line 20.