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dr2udear
New Member

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?

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
2 Replies
rjs
Level 15
Level 15

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?

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.

 

Opus 17
Level 15

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?

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.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
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