According to the IRS, he will not have to pay that money back to the IRS unless he moves or sells the home. Then he will have to pay the full $8,000 back.
I want to give some advice regarding divorce and the First Time Homebuyer Tax Credit. If you are thinking of divorce, it is best for both of you to stay in the home until the divorce is final or you have transfered your rights and interest to the home over to your spouse. Lucky for me, we were able to get the divorce done fairly quickly before the IRS came after me for having moved out of the house. I do not know what triggers them to act on that or how long it takes them to demand the money, but if they did… it would have made things extremely complicated. I do wish that I had stayed in the home because it really worried me.
It also caused me to wait until the last minute to file our 2010 taxes. I still have not filed because I have not transfered my interest to him yet. I can’t remember what it’s called… maybe a Quitclaim Deed? I have been too scared to file my taxes because of my new address and I am not trying to do anything to alert them of the move before he has full legal posession of the house. I also want to send in a copy of the divorce and transfer documents with the tax return to avoid any issues in getting my 2010 refund.
A reader shared this link on one of my previous posts. I found it to be extremely helpful. It is the IRS rules and guidelines for divorce and repayment of the First Time Home Buyer Credit and also how moving or selling the house affects repayment.
http://www.irs.gov/newsroom/article/0,,id=206293,00.html
Hope this helps! And remember, share your experiences with this too. I’m sure others would find it very helpfull.
