Instructions For Form 8828 - Recapture Of Federal Mortgage Subsidy Page 2
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3closing date of the original loan, you have
subsidized debt, not your current address
the cost of the property plus purchase
to adjust your holding period percentage
as shown on your Form 1040.
commissions and improvements, minus
(see the worksheet for line 20 on page 3)
depreciation. Do not reduce the adjusted
Line 2. Check the applicable box on line
as if your loan was fully repaid on the
basis for any gain that you did not
2 from the information on the notification
date of the refinancing.
recognize on the sale of a previous home.
given to you at the time you took out the
An MCC can be reissued in a
loan.
If you received your home, or interest
refinancing if all of the following
in a home, incident to a divorce, your
Line 3. Fill in the requested information
conditions are met.
adjusted basis is generally the same as
from the notification discussed above. If
1. The issuer reissues an MCC to
you have a problem identifying the issuer,
that of your spouse (or former spouse).
replace your existing MCC, which can be
contact your lender and ask for the
the original MCC, an MCC issued to a
For details on how to determine your
information.
transferee under Regulations section
adjusted basis, get Pub. 551, Basis of
1.25-3(p), or an MCC previously reissued
Line 4. Fill in the name and address of
Assets.
under the refinancing provisions.
the bank or other lender that provided
2. The reissued MCC takes effect
your original mortgage.
Line 13. Enter “QSML” on the dotted line
beginning with the date you refinanced
to the left of the line 13 entry space if you
Line 5. Fill in the month, day, and year
your home (refinancing closing date).
sold your home at a gain within the 9-year
that your original federally subsidized
3. The reissued MCC:
recapture period and paid a share of that
mortgage loan was provided. This
a. Applies to the same property as
gain to the QSML governmental lender. In
generally is the date of settlement on your
your existing MCC,
the amount column for line 13, enter your
home. However, if the loan became
b. Replaces entirely your existing
share of the gain. Attach a worksheet to
federally subsidized debt at a later date,
MCC,
your Form 8828 to explain how you
use that date instead.
c. Specifies a mortgage debt that
calculated your share of the gain. Show
Line 6. Fill in the applicable month, day,
does not exceed the outstanding debt
the date you paid the QSML
and year. The settlement or closing date
balance on your existing MCC,
governmental lender its share of the gain
generally is the date of sale. However,
d. Does not increase the certificate
and the amount of that share. See
Form 8828 also applies to certain other
credit rate specified on the existing MCC,
Qualifying subordinate mortgage loan (or
dispositions of your home. For instance,
and
grant) on page 1.
the date to enter on line 6 may be the
e. Does not increase the allowable
date you deeded the property to a relative
credit under your existing certificate for
Line 15. Figure your modified adjusted
(see Giving away your home under
any tax year.
gross income as follows:
Special Rules on page 1).
•
Begin with: Your adjusted gross
Repayment of the loan. Your holding
Line 8. Enter the date the original
income as shown on your Form 1040.
period percentage (line 20) may be
•
federally subsidized loan was fully repaid.
Add: Any tax-exempt interest that you
reduced (see the line 20 instructions) if
(This may be the same as the date of sale
received or accrued for the tax year.
you:
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or other disposition on line 6.) A
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Repay your loan in full or refinance
Subtract: Any gain included in your
refinanced QMB loan is fully repaid on the
other than with reissuance of an MCC (as
gross income because of the disposition
date of its refinancing (with conventional
described earlier) within the first 4 years
of your home.
financing). However, a refinanced MCC
after the closing date of your original loan,
loan that met all the conditions specified
Line 16. If your home was financed with
and
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earlier under Refinancing your home is
Sell or dispose of your home later
a federally subsidized loan, you should
considered an extension of the original
during the 9-year recapture period.
have received notification in writing from
MCC loan. Do not enter the refinancing
the bond issuer or the lender at the time
Other special rules may apply in
date for such an MCC on line 8. See
your mortgage was provided. The
certain cases. See section 143(m).
Refinancing your home and the
notification contains a table which lists
instructions for line 20.
adjusted qualifying income figures. Your
adjusted qualifying income is found in the
Specific Instructions
Part II—Computation of
column of the table that corresponds to
your family size (number of family
Recapture Tax
Note. If your home was financed with a
members living with you at the time of the
federally subsidized loan, you should
Note. You must report all required
sale) on the line that corresponds to the
have received notification in writing from
information for your interest in the home.
number of full and partial years that you
the bond issuer or the lender at the time
This may be less than 100% if someone
held your home.
your mortgage was provided. The
else also has an interest in the home (see
notification should state that your home
Special Rules on page 1).
Line 19. The federally subsidized
was financed with a mortgage loan from
amount should be found on the
Line 9. This item applies to both sales
the proceeds of a tax-exempt bond or that
notification you received from the bond
and other dispositions (see Giving away
you received a mortgage credit certificate
issuer or from your lender. It is equal to
your home under Special Rules on page
with your mortgage loan. The notification
6.25% of the highest amount of the loan
1). If your home was disposed of other
should include information needed to
that was federally subsidized. Enter the
than by sale, the sales price is the fair
figure your recapture tax and it should
figure on line 19.
market value of the home at the time of
advise you to keep it for your records.
the disposition. You should report only the
Name(s) and social security number.
Line 20. You will find your holding period
part of the sales price representing your
The name(s) and social security number
percentage on the same line of the table
interest in the home (see Two or more
on Form 8828 should be the same as
from which you obtained your adjusted
owners and Qualifying subordinate
those shown on your Form 1040.
qualifying income (see line 16
mortgage loan (or grant) under Special
instructions). However, if you fully repaid
Rules on page 1).
Part I—Description of
the federally subsidized loan within 4
Line 10. Include sales commissions,
Home Subject to Federally
years of the closing date of the loan, and
advertising, legal fees, etc., allocable to
before selling or otherwise disposing of
Subsidized Debt
your interest in the home.
your home, you will need to use the
worksheet on page 3 to redetermine your
Line 1. List the address of the property
Line 12. In general, the adjusted basis of
holding period percentage for line 20.
that was subject to the federally
your interest in the home is your share of
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Instructions for Form 8828 (Rev. 12-2009)
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