I am not sure if this would be something for mortgage brokers or accountants. We purchased our first home in 2008 and received the $7500 tax credit for first time homebuyers that was available. This credit requires repayment, $500/year for 15 years.
We are preparing to sell our home and we stand to make a profit but we still owe $5000 on that tax credit which, as far as we know, must be paid in full after the sale of our home.
Our current accountant has stated the $5000 amount can be reduced if we can provide proof of any upgrades we have made to the home and that costs associated with selling the home (e.g. repairs, closing costs, inspections) can also reduce this amount.
We have not been able to find anything else that substantiates what he is telling us and the amount we walk away with from this sale impacts our price range for our next purchase. Is he giving us the truth, half-truth, or feeding us a line?