topic If I get a grant for my first home purchase from a lender (Bank of America in this case), how much tax % am I liable to? in Get your taxes done using TurboTax

If I get a grant for my first home purchase from a lender (Bank of America in this case), how much tax % am I liable to?

dr2udear — Fri, 28 Aug 2020 04:14:16 GMT

I am a resident of WA state. BoFA is giving this grant for first home buyers with household income limitations and also mentioned that this grant is taxable and will be giving an 1099-MISC form

Re: If I get a grant for my first home purchase from a lender (Bank of America in this case), how much tax % am I liable to?

rjs — Fri, 28 Aug 2020 16:29:48 GMT

The tax on the grant will depend on the amount of your other income. On your tax return the amount of the grant will be added to your other income, and your tax will be calculated on your total income, including the grant.

You could use TaxCaster to get a rough idea of how much additional tax you will have to pay because of the grant. First do an estimate using your regular income without the grant. Then add the grant and see how much the tax increases. TaxCaster is still set up for 2019, but as of now there are no major changes expected for 2020, so it should be good enough for a rough estimate.

Re: If I get a grant for my first home purchase from a lender (Bank of America in this case), how much tax % am I liable to?

Opus 17 — Fri, 28 Aug 2020 17:21:36 GMT

Also, the grant is only taxable when it becomes free money to you. For example, if you must re-pay the grant if you sell the home in the first five years, then it does not become free money to you for five years, and will only be taxable then.