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Paying back previous tax credit
Question: "I closed on my first home in November 2008 and claimed the $7,500 tax credit when I recently sent in my taxes. I've read that the new $8,000 housing credit in the stimulus package is for homes bought after January 1, 2009. Am I going to completely miss out on this credit and still have to repay the $7,500, since it was more of a loan than a credit?" - Angela Cook, Rockford, Ill.

Expert: Robert Dietz, economist, National Association of Homebuilders

Answer: The short answer is yes; the house must be purchased between Jan. 1, 2009 and Nov. 30, 2009 to qualify for the new plan, so you miss on the latest credit and will have to repay the previous credit. Unfortunately, the way the stimulus bill was drafted makes it like two tax credit programs that run consecutively. The 2009 purchaser receives a substantially more valuable credit.

The good news is that your $7,500 tax credit, which was part of the Housing Recovery Act passed last summer, is still a good deal. You don't have to start repaying it for two years from the date of sale, and you have 15 more years to pay it all back. The value of this, which amounts to a tax-free loan, is about $4,000.

NEXT: Define 'first-time buyer'
Last updated February 24 2009: 6:58 AM ET
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