Make Sure You Are Getting the Best Tax Advice

Recently I had a client call me to complain about how upset she was regarding the fact that she was only getting half of the $8000 tax credit. She had purchased a duplex a couple of months ago and was expecting to receive 10% of half of the sales price (since she was renting out the other half of the duplex and receiving rental income). She was, therefore, expecting to get $7500 (10% of $75K instead of 10% of the full purchase price of $150K)

She was very upset because she had recently been to H&R Block to have her taxes done and they insisted on the fact that she was only entitled to half of the tax credit ($4000) rather than 10% of half of the purchase price ($7500).

Now, I am not a tax accountant and don’t even pretend to be. But, I called the IRS and they confirmed that this is indeed wrong. She was indeed entitled to 10% of half of the purchase price ($7500), NOT half of the tax credit ($4000).

So, don’t assume that H&R Block knows what they are talking about. If you (or your clients) have questions regarding the tax credit or any other tax related issues, contact the IRS!

You can get answers to questions about general tax rules by calling (800) 829-1040 (Option 2, Option 1, Option 4).