Reply #2: No problem...

[Kingshakabobo]

I SHOULD point out that there are some "recapture" provisions if you do not keep the property for 9 years.......BUT........they only kick in if your income is over the limit at time of sale/disposal of the property. Also, the income limits will be adjusted UP at about 5% per year.

For example: If the limit is 60,320(non target) when you close.......the limit will be $73,590 five years later ($60,320 x 122%).......Sooooo, if your income is not above $73,590 at time of sale you are not subject to recapture.

I wouldn't put one of my clients in this program if they were close to the limit AND intended to sell within the 9 year period. This probably isn't a good idea for, say, a doctor/resident expecting to triple their income but if you are someone with a defined pay schedule (teacher,fireman etc.) it's a no-brainer.

Another "safety valve" feature is the program will never take back more than 50% of your gain if/when you sell. If you don't make a profit, you don't pay recapture. This feature would protect someone who "hits it big" and sells within a couple years.