Fed Recapture Tax Demystified.

Mmmm, hmm -- whyyy? I asked dryly, lips pursed, tired of borrowers who declined to sign docs at the table for a range of reasons.

Well, it would seem there's a tax form in the loan documents that her loan officer didn't let her know about. What should I do? I punctiliously contemplated my reply. Your rates might be dropped by one to two % if you've had the same rate for at least ninety days. The Obama administration is helping the Yankee folks fight back by lowering IRs and providing much wanted information on how to stay out in front of the curve. Recapture tax triggers on the passing of a particularly specific set of events : * the house is sold inside 9 years from the first purchase date and * the house is sold at a profit and * the borrowers revenue surpasses Fed earnings thresholds established in the year the house was originally bought. In truth, in my six years working as a bond administrator for a countrywide mortgage bank, I witnessed only a few cases where recapture tax really caused on the sale of a home. Those thresholds are set at the maximum moderate revenue limit established the year the house was originally purchased. It is possible yet observedly doubtful, ones earnings will surpass maximum Fed. earnings thresholds or surpass the five percent each year permitted for incomes to extend under this provision. If at time of sale conditions *, * and * don't apply, will recapture tax trigger? No In the event the house is sold in year 9 and one day yet conditions * and * do apply, will recapture tax trigger? No In the event the house is refinanced, will recapture tax trigger or go away? After a refinance, recapture tax won't trigger the recapture tax provision won't magically vanish after a refinance either.