What is the Federal Recapture Tax?
It’s a federal tax that some borrowers with a mortgage revenue bond program home loan may be required to pay from the net profit they receive from the sale of their home. If the borrower is subject to recapture tax, it would be due when they file their federal income tax for the year in which they sell their home. The maximum tax is limited to the lesser of 6.25 percent of the original loan amount or 50% on the gain on the sale of the home.
