After renting an apartment for five years, Todd and Diane purchased a new home on July 1, 2008. On their 2008 joint tax return, they claimed a $7,500 first-time home buyer credit. Answer the following questions relating to the credit.
a. Assuming they still live in the home, what amount of credit must Todd and Diane repay with their 2014 tax return?
b. Assuming they sell the home in August 2014 for a $20,000 gain, what amount of credit must they pay back with their 2014 tax return?
c. Assuming they sell the home in August 2014 for a $3,000 gain, what amount of credit must they pay back with their 2014 tax return?