Recapture of Federal Mortgage Subsidy

[satrianodee]

I was the only one on the mortgage and the MCC (Mortgage Credit Certificate) because I bought the house when single but I got married and then filed jointly when receiving the mortgage interest credit in subsequent years. I sold the house last year (7 years and 3 months) after purchasing. When figuring out the Recapture Credit on form 8828 Do I use just my Adjusted Gross Income for line 15 or do I use both mine and my spouses since we are filing jointly? If I have to use both, would it be better to file married filing separately? 

[MaryK4]

If your Line 17 is more than $5,000 you would have to repay 100% of the subsidy so there is no need to file separate just for this. If the Line 17 is less than $5,000 you would get a reduced repayment percentage so it would benefit you.

[satrianodee]

Thanks for the reply. My adjusted qualifying income on line 16 is  $134,146 so if I file separately my amount on line 17 would be zero. If we file jointly it would be more then $5,000. I guess I am asking if I can file separately since I'm the only one on the MCC and mortgage or do I have to file jointly since we filed jointly when getting the credit each year?

[MaryK4 · Accepted solution]

You are not required to file joint since your spouse was not on the original mortgage or MCC so filing separate is perfectly acceptable. @satrianodee