This article explains the recapture tax on the mortgage subsidy for federally subsidized home buyers who have sold or otherwise disposed of their home. It outlines who must file, when to file, and special rules that may apply if you have given away or destroyed your home.
What is Form 8828?
Form 8828 is a form used to figure and report the recapture tax on the mortgage subsidy for a federally subsidized home that has been sold or otherwise disposed of. The home must have originally been purchased with a qualified mortgage bond (QMB) or a mortgage credit certificate (MCC) and the seller must have met certain eligibility requirements in order to qualify for the mortgage subsidy. This form must be attached to the Form 1040 for the tax year in which the home was disposed of and, if due, the recapture tax should be included with the return. Special rules may apply for certain circumstances including gifts, divorces, or destruction of the home by natural disaster.
IRS Form 8828 – Who Needs to Fill It Out?
Anyone who sold or otherwise disposed of their federally subsidized home within the first 9 years of receiving a federal mortgage subsidy, such as a QMB-funded loan or an MCC, need to fill out this form. This may also include those who gave away their home (other than to a spouse/ex-spouse), and those with two or more owners of the home. Exceptions may apply for those disposing the home as part of a divorce, and those whose home has been destroyed by casualty. Refinancing of the loan does not require completing the form, but a later sale or disposition after the refinancing may.
Step-by-Step: Form 8828 Instructions For Filling Out the Document
To determine if you must file Form 8828, review the information on the Federal Mortgage Subsidy, Recapture Tax, Who Must File, and Special Rules provided. If all of the conditions are met, you must file your Form 8828 when the Form 1040 is due (including extensions) and attach it to the return. Be sure to follow the appropriate exceptions in the Special Rules section if applicable. Additionally, review the Replacement Period rules in Pub. 547 and the Repayment of the Loan rules in section 143(m) for other special rules that may be relevant.
Below, we present a table that will help you understand how to fill out Form 8828.
| Form 8828 | Instructions |
|---|---|
| To determine if you must file Form 8828, review the information on the Federal Mortgage Subsidy, Recapture Tax, Who Must File, and Special Rules provided. If all of the conditions are met, you must file your Form 8828 when the Form 1040 is due (including extensions) and attach it to the return. Be sure to follow the appropriate exceptions in the Special Rules section if applicable. Additionally, review the Replacement Period rules in Pub. 547 and the Repayment of the Loan rules in section 143(m) for other special rules that may be relevant. |
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Do You Need to File Form 8828 Each Year?
You must file Form 8828 if you sold or otherwise disposed of your home and meet the criteria listed in the “Who Must File” section of the form. This includes if the original mortgage loan was provided after December 31, 1990 and you received a federal mortgage subsidy. Additionally, if your home is destroyed by fire, storm, flood, or other casualty, you may not need to file the form. See the “Special Rules” section of the form for a comprehensive list of parameters as to when you must and must not file.
Download the official IRS Form 8828 PDF
On the official IRS website, you will find a link to download Form 8828. However, to make it easier for you, we are providing the link in our article, which comes directly from the official irs.gov website! Click to download: Form 8828
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