"Recapture Tax" question (loan, income tax, credit, requirements)

[whoisjongalt]

Has anyone ever had to deal with paying a "recapture tax" on the sale of a house purchased under FHA guidelines.

Basically their site states: "Some CHFA mortgage loan programs are funded by tax exempt mortgage revenue bonds. If you use these programs or receive a credit against your federal income taxes through a Mortgage Credit Certificate, you could be subject to the Federal Recapture Tax if and when you sell your home."

The rules for figuring out whether or not a there will be a recapture tax seem so complicated, I'm ready to just go to a CPA. Has anyone ever had to deal with this?

[charlesclark]

In order for the CHFA Recapture tax to occur three things need to happen.
1) The homeowner needs to sell the house within the first 9 years.

2) The homeowner needs to make a capital gains.

3) The homeowner needs to exceed the CHFA Income Limits for that particular year of the Loan the he/she is in.

Hope that this helps

[whoisjongalt]

Thanks. It's the 3rd thing that has me confused. I already meet the first two requirements but it seems really complicated to figure out whether or not I exceed the income limits. There is this complicated formula for figuring it out. If I do have to pay it, the FHA will refund the money to me but I'd still have to pay it first.

[charlesclark]

Has your income gone up since you got the loan?

[whoisjongalt]

I was able to look up that my area is in one of those special "zones" but that's as far as I could get. My income has gone up by approx. 20% since I got the loan.