Fillable Form 8396 - Mortgage Interest Credit

Form 8396 (2012)

Page

General Instructions

Specific Instructions

Future Developments

Part I—Current Year Mortgage Interest

Credit

The IRS has created a page on IRS.gov for more information about

Form 8396, at Information about any future

Line 1

developments affecting Form 8396 (such as legislation enacted

Enter the interest you paid during the year on the loan amount

after we release it) will be posted on that page.

(certified indebtedness amount) shown on your MCC. In most

Purpose of Form

cases, this will be the amount in box 1 on Form 1098, Mortgage

Interest Statement, or on a similar statement you received from your

Use Form 8396 to figure the mortgage interest credit for 2012 and

mortgage holder. If the loan amount on your MCC is less than your

any credit carryforward to 2013.

total mortgage loan, you must allocate the interest to determine

Who Can Claim the Credit

the part that relates to the loan covered by the MCC. See Pub. 530

for an example of how to allocate the interest.

You can claim the credit only if you were issued a qualified

Mortgage Credit Certificate (MCC) by a state or local governmental

Line 2

unit or agency under a qualified mortgage credit certificate

The certificate credit rate cannot be less than 10% or more than

program.

50%.

Certificates issued by the Federal Housing

▲

Line 3

Administration, Department of Veterans Affairs, and

Farmers Home Administration, and Homestead Staff

If you refinanced, see Refinanced Mortgage on this page.

Exemption Certificates do not qualify for the credit.

CAUTION

If the certificate credit rate shown on line 2 is more than 20%,

multiply line 1 by line 2, but do not enter more than $2,000 on line

The home to which the certificate relates must be your main

3. If you and someone else (other than your spouse if filing jointly)

home and also must be located in the jurisdiction of the

held an interest in the home, the $2,000 limit must be allocated to

governmental unit that issued the certificate.

each owner in proportion to the interest held. See Dividing the

If the interest on the mortgage was paid to a related person, you

Credit in Pub. 530 for an example of how to make the allocation.

cannot claim the credit.

Reduction of home mortgage interest deduction on Schedule A

(Form 1040). If you itemize your deductions on Schedule A, you

Refinanced Mortgage

must reduce the amount of home mortgage interest you would

You can refinance your mortgage without losing this credit if your

otherwise deduct on Schedule A by the amount on Form 8396, line

existing MCC is reissued and the reissued certificate meets all of

3, and report the reduced amount on Schedule A. You must do this

the following conditions.

even if part of the amount on line 3 is carried forward to 2013.

• It must be issued to the holder(s) of the existing certificate for the

Part II—Mortgage Interest Credit

same property.

Carryforward to 2013

• It must entirely replace the existing certificate. The holder cannot

retain any portion of the outstanding balance of the existing

If the amount on line 9 is less than the amount on line 7, you may

certificate.

have an unused credit to carry forward to the next 3 tax years or

• The certified indebtedness on the reissued certificate cannot

until used, whichever comes first. The current year credit is used

exceed the outstanding balance shown on the existing certificate.

first and then the prior year credits, beginning with the earliest prior

year.

• The credit rate of the reissued certificate cannot exceed the credit

If you have any unused credit to carry forward to 2013, keep a

rate of the existing certificate.

copy of this form to figure your credit for 2013.

• The reissued certificate cannot result in a larger amount on line 3

If you are subject to the $2,000 credit limit because

▲

than would otherwise have been allowable under the existing

your certificate credit rate is more than 20%, no amount

certificate for any tax year.

over the $2,000 limit (or your prorated share of the

For each tax year, you must determine the amount of credit that

$2,000 if you must allocate the credit) may be carried

CAUTION

you would have been allowed using your original MCC. To do this,

forward for use in a later year.

multiply the interest that was scheduled to be paid on your original

mortgage by the certificate rate on your original MCC. The result

—

Line 8

Credit Limit Worksheet

may limit your line 3 credit allowed when you have a reissued

Keep for Your Records

MCC, even if your new loan has a lower interest rate.

If the certificate credit rates are different in the year you

1. Enter the amount from Form 1040, line 46, or

refinanced, attach a statement showing separate calculations for

. 1.

Form 1040NR, line 44 .

lines 1, 2, and 3 for the applicable parts of the year when the

2. Form 1040 filers: Enter the amounts from

original MCC and the reissued MCC were in effect. Combine the

Form 1040, line 47 through 50; line 12 of the

amounts from both calculations for line 3. Enter that total on line 3

Line 11 Worksheet in Pub. 972*; Form 5695,

of the form and enter “see attached” on the dotted line next to

line 2.

line 32; Form 8834, line 23; Form 8910, line 22;

Form 8936, line 23; and Schedule R (Form

For more details, see Regulations section 1.25-3(p).

1040A or 1040), line 22.

Recapture of Credit

Form 1040NR filers: Enter the amounts from

If you buy a home using an MCC and sell it within 9 years, you may

Form 1040NR, lines 45 through 47; line 12 of

have to recapture (repay) some of the credit. See Pub. 523, Selling

the Line 11 Worksheet in Pub. 972*; Form

Your Home, and Form 8828, Recapture of Federal Mortgage

5695, line 32; Form 8834, line 23; Form 8910,

Subsidy.

line 22; and Form 8936, line 23. .

Additional Information

3. Subtract line 2 from line 1. Enter this amount

on Form 8396, line 8. If zero or less, enter -0-

See Pub. 530, Tax Information for Homeowners, for more details.

here and on Form 8396, lines 8 and 9, and go

to Part II of Form 8396.

*If you are not claiming the child tax credit, you do not need

Pub. 972.

Form 8396 - Mortgage Interest Credit - 2012 Page 2

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