If you purchased a home in 2008, 2009, or 2010 and claimed a first-time homebuyer credit, you may have to “repay” some or all of it on your 2012 return. Repayment effectively means including the repayment amount as taxes you owe.
The IRS’s First-time Homebuyer Credit Account Look-up Tool tells you how much to report on your 2012 return. Simply enter your Social Security number, date of birth, street address, and zip code, and then click on “Check Your Account!” If you took the credit on your 2008 return, you probably must repay one-fifteenth of the credit amount, or $500 if you claimed the maximum credit of $7,500. If you took the credit on your 2009 or 2010 return, you may have no recapture. When in doubt, talk with your tax advisor.
Hobby expenses are deductible only up to income from the activity; loss deductions are not allowed.