STATE BOND LOAN

[snale]

IF I RECEIVED A STATE BOND LOAN TO HELP WITH A DOWN PAYMENT FOR MY HOME, DO I NEED TO REPORT THAT ANYWHERE?

[ToddL · Accepted solution]

No, you do not report mortgage down-payment assistance on your tax return. It is not taxable income.

From IRS Publication 525 (2015), Taxable and Nontaxable Income:

Down payment assistance.   If you purchase a home and receive assistance from a nonprofit corporation to make the down payment, that assistance is not included in your income. If the corporation qualifies as a tax-exempt charitable organization, the assistance is treated as a gift and is included in your basis of the house. If the corporation does not qualify, the assistance is treated as a rebate or reduction of the purchase price and is not included in your basis.