| Mobile Home Owners Forced to Move from a Closing Park |
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The 2007 Oregon Legislature made changes to the tax credit available to mobile home owners for the involuntary move of a mobile home in tax years 2007 and later. Here are some common questions to help you better understand the law changes and what is available.
What is the difference between the credits for tax year 2006 and 2007?
- To claim the 2006 involuntary move of a mobile home credit, you must have moved your mobile home during 2006 after receiving notice that the park was closing. To qualify for this credit, you had to meet the following requirements:
- You owned and occupied the mobile home;
- You had household income of $60,000 or less; and
- Your home was worth $110,000 or less.
The credit was based on your expenses to move your mobile home and was limited to $10,000. The credit was either refundable or non-refundable depending on your household income and size. A new 2007 law repealed this credit for tax years after 2006. - For 2007 through 2012, there is a different credit available. The mobile home park closure credit also requires you to own and occupy your mobile home and to have received notice that the park is closing. To claim this credit in 2007, you and all members of your household must move out of the park during 2007. You are not required to move your mobile home to qualify for this credit. The credit is $5,000 for those who qualify. It is not based on household income, value of the mobile home, or moving expenses. The mobile home park closure credit is refundable to all qualifying taxpayers. You will claim the credit on the tax return for the year you move out. If you move out in 2008 and qualify for the credit, you will claim it on your 2008 tax return (which you will file in 2009).
How do I qualify for the new credit for 2007 and later?
To qualify you must meet all of the following requirements:
- Own your mobile home;
- Rent space in a mobile home park that is closing;
- Occupy your mobile home as your principal residence;
- Receive notice that the park is closing; and
- Move out (and all members of your household) of the mobile home park on or after January 1, 2007 because of the park closure notice.
I meet the qualifications for the mobile home park closure credit. How and when do I claim it?
You must claim the mobile home park closure credit on the tax return for the year you move out of the closing park. Complete and attach Schedule MPC to your return.
Example 1: Don and Martha qualify for the credit. Don, Martha, and their son (all members of their household) move out of the park on March 3, 2007. Don and Martha will claim the $5,000 refundable credit on their 2007 tax return. They will fill out and attach Schedule MPC to their 2007 tax return. The due date for 2007 tax returns is April 15, 2008.
Example 2: Bob and Theresa qualify for the credit. They sell their mobile home and move out of the park on February 10, 2008. They will claim the $5,000 refundable credit on their 2008 tax return which is due April 15, 2009. They will fill out and attach Schedule MPC to their 2008 tax return.
I don't file an Oregon tax return, because I only have Social Security income. Can I still get the credit if I qualify?
Yes. File Oregon Form 40S, even if you don't owe Oregon tax and are not required to file a tax return. Even though you are normally not required to file because your income is not taxable or below the filing requirement, you must file an Oregon tax return to claim this credit. File the return for the year you move out of the closing park. Complete and attach Schedule MPC to your Oregon tax return.
I paid $12,000 to move my mobile home in February 2007 before the new law was enacted. Can I claim the $10,000 credit that was in effect at that time?
No. The new law is retroactive to January 1, 2007 and the old law was repealed for tax year 2007. If you qualify, you can only claim the mobile home park closure credit, which is a $5,000 refundable credit.
I qualified for and claimed the non-refundable credit for involuntary move of a mobile home on my 2006 tax return. The non-refundable credit was required to be claimed over three tax years. Do I still get to claim the rest of the credit?
Yes. Those who moved their mobile home in 2006 and qualified for the non-refundable credit may still claim one-third of the total allowed for 2007; and one-third for 2008. If the credit is not used up, it may be carried forward up to five years under the law for tax year 2006.
In 2006, I moved my mobile home out of a park that was closing and did not claim the credit. Can I amend my 2006 tax return to claim the involuntary move of a mobile home credit?
Yes. If you meet the qualifications, you may claim the credit for involuntary move of a mobile home on your 2006 tax return. If you already filed your 2006 Oregon tax return and did not claim this credit, you may amend your return.. See Oregon Amended Schedule instructions for time limits.
In 2006, I moved out of a park that was closing and could not afford to move my mobile home so I didn't qualify for the 2006 credit. Can I claim this new credit for mobile home park closure on my 2007 tax return?
No. To qualify for the mobile home park closure credit on your 2007 tax return, you must have moved out of the closing park in 2007.
I received $7,000 from the owner of the closing park because of the new state law. Do I have to pay taxes on this?
You may have to claim this payment as income on your federal tax return, but you do not have to pay Oregon taxes on the payment required by the new state law. If you claim the $7,000 as income on your federal tax return, you may claim a subtraction on your Oregon return. You may also qualify for the mobile home park closure credit.
Payments required by other local or federal laws may also be taxable on your federal return. Other payments that are federally taxable are also taxable to Oregon and may not be subtracted. Contact the IRS at 1-800-829-1040 or your tax advisor to determine if you are required to include these payments as income on your federal return. Contact us if you need help figuring out the subtraction for your Oregon tax return.
Example 3: Larry and Barbara were paid $7,000 by the owner of the closing park ($7,000 is required by the new state law). They moved out of the closing park on October 15, 2007. They qualify for the mobile home park closure credit. When they file their 2007 tax return, they will claim the $7,000 payment from the landlord as income on their federal tax return. On their Oregon tax return, they will claim a subtraction for $7,000 since the payment is not taxable to Oregon. They will also claim the mobile home park closure credit of $5,000.
Do I have to reduce my mobile home park closure credit by payments from the park owner or a government agency?
Generally you do not have to reduce your credit by these payments. However, if you receive a payment due to eminent domain, then you will need to reduce your credit by that amount. Eminent domain is when local, state, or federal governments purchase private property to convert to public use.
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