Form 8828 is used to figure and report the recapture tax a federal mortgage subsidy if the taxpayer sold or otherwise disposed of the federally subsidized home.
If a taxpayer sold or otherwise disposed of their home during the first nine years after they received a federally subsidized QMB or MCC loan, they may have to pay back, or recapture all or part of the federal mortgage subsidy they received by increasing federal income tax in the year the home was sold or disposed of.
Form 8828 must be filed if all of the following apply:
- The taxpayer sold or otherwise disposed of their home (whether or not a gain was realized)
- The taxpayer's original mortgage loan was provided after December 31, 1990
- The taxpayer received a federal mortgage subsidy
To access Form 8828 in the desktop program, from the main menu of the tax return (Form 1040), select:
- Other Taxes
- Other Additional Taxes
- Recapture of Federal Mortgage Subsidy (8828) - You will be prompted for all required information to complete the from. The taxpayer should have received notification in writing from the bond issuer at the time the mortgage was provided. The notification should state the home was financed with a mortgage loan from the proceeds of a tax-exempt bond or that a mortgage credit certificate was received with the mortgage loan. The notification should include information needed to figure the recapture tax and complete Form 8828.
Additional Information:
