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Form 8828: Recapture of Federal Mortgage Subsidy
IRS Form 8828 is used to figure and report the recapture tax on a mortgage subsidy if a federally subsidized home was sold or disposed of. This form applies when an original mortgage loan was provided after December 31, 1990.
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IRS Form 8828 - Recapture of Federal Mortgage Subsidy
IRS Form 8828 is used to figure and report the recapture tax on a mortgage subsidy if a federally subsidized home was sold or disposed of. This form applies when an original mortgage loan was provided after December 31, 1990.
Risk Radar
Scan points- 1If giving away the home, ensure Line 9 uses its fair market value at disposition, not just a sale price.
- 2Listing the current address instead of the property address on Part I, Line 1.
- 3Failing to check the applicable box on Part I, Line 2 based on your loan notification.
- 4Not reporting the sales price as fair market value if the home was given away (not sold).
- 5Omitting sales commissions or legal fees from the computation on Part II, Line 10.
Plain English
This form helps calculate the extra tax owed (recapture tax) when you sell a house that benefited from a federal mortgage subsidy. You must file it to report this specific recapture amount on your main income tax return, like Form 1040.
Submission Date
- Filing date: 2025-01-22 22:11:16
- Preparation window: collect IDs, supporting records, and signatures in advance.
- Final review: verify names, dates, and required fields before submission.
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What this form is for
- Use this form when you sold or otherwise disposed of your federally subsidized home, your original mortgage loan was provided after December 31, 1990, and you received a federal mortgage subsidy.
- Do not use Form 8828 if neither the Mortgage loan from a tax-exempt bond nor the Mortgage credit certificate applies to your home's financing.
- Check Form 1040 instead when attaching this form because it is the primary return for which Form 8828 must be attached.
Form selector
Use this form or another form?
Gave away the home (not to spouse/ex-spouse)
Recapture tax must be figured as if sold for fair market value at disposition.
✓ Check line 13 instructions.
Received a Qualifying Home Improvement Loan (QHIL)
There is no recapture of the subsidy if the QHIL was funded by a QMB and limited to $15,000.
✓ Check section 143(k)(4).
Had a Qualifying Subordinate Mortgage Loan (QSML)
If you had a QSML, review line 13 instructions regarding the required sell/share agreement within 9 years.
✓ Check section 143(k) (10).
Deadline or filing window
The filing trigger is selling or otherwise disposing of the home. The deadline to file with your tax return is when that return is due, which includes any extensions granted. If casualty destruction occurs and replacement isn't done in time, you must file Form 8828 with Form 1040X.
Checklist
What you need before filling it out
Part I: Address of property
Number and street, city/town, state, ZIP code · Form 8828, Line 1
Part I: Type of subsidy
Check box (a) or (b) · Form 8828, Line 2
Part II: Sales price
Amount sold/disposed for · Form 8828, Line 9
Part II: Expenses of sale
Commissions, advertising, legal fees, etc. · Form 8828, Line 10
Part II: Tax calculation
Smaller of line 14 or line 22 · Form 8828, Line 23
Holding Period Worksheet (A)
Closing date of original loan · Form 8828, Line 5
Before you submit
- 1Ensure you have completed Part I, especially providing the correct Address of property.
- 2Verify that you checked either box (a) or (b) on Form 8828, line 2.
- 3Confirm that Line 13 (Gain or loss from sale or disposition) is calculated correctly by subtracting Line 12 from Line 11.
- 4If Line 13 is a loss, confirm you stop there and attach the form to Form 1040.
- 5Calculate Line 22 by multiplying Line 13 by the percentage on Line 18.
- 6Enter the final amount on Line 23 as the smaller of Line 14 or Line 22.
- 7Attach Form 8828 to your Form 1040, 1040-SR, or 1040-NR for the correct tax year.
How to file this form
- 1Complete Part I by entering the Address of property and checking the applicable Federal Mortgage Subsidy type on Line 2.
- 2Calculate Part II by determining the Amount realized (Line 11) and subtracting your Adjusted basis (Line 12) to find Gain or loss (Line 13).
- 3Multiply your gain/loss (Line 13) by 50% (Line 14), then multiply Line 21 by the percentage on Line 18 to get Line 22.
- 4Enter the smaller of the two amounts onto Line 23, and attach Form 8828 to your Form 1040, 1040-SR, or 1040-NR when filing.
Known limitations
- 1The form does not apply if neither box under Part I, Line 2 applies (i.e., no mortgage loan from a tax-exempt bond or MCC).
- 2If giving away the home to your spouse or ex-spouse incident to divorce, you do not need to file Form 8828 if no gain or loss was included in or deducted from income on the return.
- 3If the home is destroyed by casualty and replaced on its original site within 2 years after the end of the tax year when the destruction happened, there generally is no recapture tax.
- 4A transfer of an interest in the home by one spouse (or former spouse) to another does not result in recapture tax if it is incident to divorce AND no gain or loss was included in or deducted from income on the return.
Field map
Compact field-by-field guide
Entity Info
1 items
Name and taxpayer ID of the entity claiming the credit.
Credit Info
1 items
Type of credit or incentive being claimed.
Calculation
2 items
The base amount used to calculate the credit.
Calculated credit amount after applying formulas and limitations.
Certification
1 items
Detailed breakdown supporting the credit calculation.
Signatures
1 items
Sign and date the form.
Almost done reviewing the fields?
Fillable formOpen in Editor->The current edition is Revision November 2024. The form directs users to www.irs.gov/Form8828 for the latest information, and no specific changes from a prior revision are detailed in this source.
What changed or needs a fresh check
- Edition date — confirm the revision reads November 2024.
- Catalog Number — confirm it is 14075L.
- Mailing address — Not stated in the official source (but listed on form).
- Signature — Sign before sending (implied, but required for filing).
- Tax Year — ensure you are reporting the year you sold or disposed of the home.
Quick Facts
Downloads
After you file
- 1Keep a copy of Form 8828 for your records.
- 2Attach Form 8828 to your Form 1040, 1040-SR, or 1040-NR when filing the tax year in which you sold or disposed of the home.
- 3File the form with your tax return by its due date (including any extensions).
- 4If replacing a casualty-damaged home after the initial deadline, file Form 8828 with Form 1040X, Amended U.S.
Sources
- SRCInstructions p.1 — The purpose of Form 8828 is to figure and report the recapture tax on the mortgage subsidy when selling or disposing of a federally subsidized home.
- SRCInstructions p.1 — You must file Form 8828 if you sold or disposed of your home, the original loan was after 12-31-1990, and you received a federal mortgage subsidy.
- SRCInstructions p.1 — Attach Form 8828 to Form 1040, 1040-SR, or 1040-NR for the tax year of sale/disposition.
- SRCInstructions p.2 — For Line 9 (sales price), if disposed of other than by sale, use the fair market value at the time of disposition.
- SRCInstructions p.2 — In general, the adjusted basis for Form 8828, Line 12 is your share of cost + purchase commissions and improvements minus depreciation.
- SRCInstructions p.3 — The Holding Period Percentage Worksheet should be used if you fully repaid the original loan (before sale/disposition AND within first 4 years after closing).
Common confusion points
What do I use as the 'sales price' if I gave away my home?
The sales price is the fair market value of the home at the time of disposition, unless it was a sale.
How do I calculate my adjusted basis for Form 8828?
Generally, your adjusted basis is your share of the cost plus purchase commissions and improvements, minus depreciation. If you received the home in divorce, use your spouse's basis.
When should I use the Holding Period Percentage Worksheet?
Use it if you fully repaid the original federally subsidized loan to figure the percentage before sale/disposition AND within 4 years after closing.
Workflow map
Related forms and next steps
Before
Current
After
Often used with
⚠ If something goes wrong
- Use Form 1040X, Amended U.S., if you do not replace a casualty-damaged home in time.
Questions about IRS Form 8828
What is IRS Form 8828 used for?
This form helps calculate the extra tax owed (recapture tax) when you sell a house that benefited from a federal mortgage subsidy. You must file it to report this specific recapture amount on your main income tax return, like Form 1040.
Who must file IRS Form 8828?
You must file IRS Form 8828 if you sold or otherwise disposed of your home, and your original mortgage loan was provided after December 31, 1990 while you received a federal mortgage subsidy.
What information does IRS Form 8828 require?
Part I describes the Home Subject to Federally Subsidized Debt by listing its address (Line 1) and the date the original loan was provided (Line 5). Part II computes the Recapture Tax using figures like sales price (Line 9) and adjusted basis (Line 12).
When is IRS Form 8828 due?
The form must be attached to your Form 1040, 1040-SR, or 1040-NR for the tax year in which you sold or otherwise disposed of your home. It should be filed when that return is due (including extensions).
Where do I file IRS Form 8828?
Attach IRS Form 8828 to your relevant Form 1040 series return, and file it with that return when it is due.
How do I complete IRS Form 8828?
First, complete Part I by detailing the home's address and loan dates. Next, fill out Part II to compute the recapture tax using figures like sales price and adjusted basis. Finally, keep the Holding Period Percentage Worksheet for your records if you fully repaid the original subsidized loan.
What happens if IRS Form 8828 is filed incorrectly?
Failing to report the recapture tax correctly on Form 8828 can result in an incorrect calculation of your total tax liability for the year. Special rules must also be followed regarding how the tax is figured depending on the disposition type.
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