Repayment of $7,500 Tax Credit (loan)

[cdtotten]

Hey everyone,

We were one of the few unlucky folks who got the $7,500 repayable tax credit in 2008. My question is this, we are planning to either sell or rent our condo this year. We know that if we sell it, we have to adjust the basis by the amount of the credit, but once we add back some costs and improvements it's not a big deal. We will almost break even, and thus have the debt forgiven (which is fine).

However, we would like to rent the condo out. We have an FHA loan on the property and our lender said that because our family size is increasing (new baby), we will be eligible to use the FHA loan to rent the property out without issue. Our concern is any effect this has on the tax credit. Will we just begin making the $500 payments next year without issue?

[gpeach]

This addresses the selling issue. Page 6. Renting out not sure on. 

http://www.bhgrealestate.com/LibraryFiles/Hello/Media_Center/Related_Stories/2008/hbtaxcreditqa2008....

[DallasLoanGuy]

call the numbers at irs.gov

or ask your accountant/cpa

i seem to remember something about owner occupied for those repayment yrs or it accelerates. but i have been drunk since then.... maybe i dreamed it