The $8000 First Time Homebuyer Tax Credit
The $8000 TAX CREDIT HAS BEEN EXTENDED
AND CURRENT HOME OWNERS CAN NOW
QUALITY FOR $6,500 TAX CREDIT
Must Place Home Under Contract by 30
April 2009 & Close by 30 June 2010
SEE UPDATED DETAILS BELOW!!!
First Time Homebuyer Definition
•Defined
as someone who has not owned a primary residence at any time
during the three years prior to the date of purchase.
–For
example, if you bought a home on January 15, 2009, you cannot take the
credit for that home if you owned, or had an ownership interest in,
another home at any time from January 15, 2006 through January 15, 2009.
Another example, you
sold your home July 17, 2006. You may not want to close on your new home
until July 17, 2009 (or a few days later to be safe) That’s three years
without owning a home, and you are considered a first time home buyer.
–So
if the last time you owned a home was 2006, you are eligible for the
credit even though it is really not your “first” home.
–For
married joint filers, both must meet the 1st time homebuyer
test to take the credit on a joint return.
Credit Details
•The
new Credit is an $8,000 REFUNDABLE Tax Credit (or up to 10% of the
purchase price). And you do not have to pay it back as long as you live
in the home at least three years.
–If
the property is $60,000, the credit is only $6,000. (10%) If the
purchase price is $80,000 or more, you can receive the entire credit.
•Refundable
means that if your total tax liability in the given year is less than
$8,000, the IRS will send a refund for the balance.
For
example, if you owe $2000 income taxes, you will receive a refund check
for $6,000. If like most filers, you normally receive an income tax
refund, add $8,000 to the amount you expect to receive back.
Who Qualifies for the Current Home Owners $6,500 Tax
Credit?
Current home owners purchasing a home between November 7,
2009 and April 30, 2010, who have used the home being sold or vacated as
a principal residence for five consecutive years within the
last eight years.
When Can You Claim the Credit?
•It
can be claimed on your 2009 Tax Return (to be filed by April 15, 2010),
or with an amended 2009 Tax Return if you have already filed your 2009
return before you close o your new home.
The Home
•Must
be the “main home” i.e. principal residence. Which is generally
considered to be the home where you spend 50% or more of your time. It
can be a condo, Single Family detached, co-op, townhouse or something
similar.
•The
home must be located in the United States.
•Vacation
homes and rental properties are not eligible.
•For
new construction, the “purchase date” is the date you occupy the home.
So the move in date must be on or before 30 June 2010.
Time Limits
The
home must be placed under contract on or before 30 April 2010 and the
sale must close on or before 30 June 2010.
Income Limits
Singles Up to $125,000 a year for the full credit. Up to $145,000 for a
partial credit.
Married Up to $225,000 a year for the full credit. Up to $245,000 for a
partial credit.
More on Income Limits
This
means that for singles making over $125,000 and couples making over
$250,000, the credit is proportionately reduced as incomes approach
$145,000 and $245,000 respectively.
Who cannot take the credit?
If any of the
following:
–Your
income exceeds the phase-out range. This means joint filers with
Modified Adjusted Gross Income (MAGI) of $245,000 and above and other
taxpayers with MAGI of $125,000 and above.
–You
buy your home from a close relative. This includes your spouse, parent,
grandparent, child or grandchild.
–You
are a nonresident alien.
Recapture-3 Year Residency
•As
long as you live in the home at least three years, you do not have to
repay the tax credit.
–If
the home is sold prior to three years of ownership, the tax credit must
be repaid.
–If
you stop using your home as your main home, the tax credit must be
repaid.
•This
provision is designed to prevent flipping homes in order to get the
credit.
Special Provisions for Members of the Military
Armed services members, as well as
intelligence service and foreign service personnel, who
are on active duty and out of the U.S. for 90 days
during any part of 2009, get an additional year to buy
their homes, to May 1, 20ll.
Another benefit is a waiver on the time of occupancy of
the home purchased with the tax credit. Homebuyers who
purchase their home using the tax credit must use that
home as a principal residence for a period of no fewer
than three years, or must forfeit the entire credit.
Military, intelligence and foreign service members do
not have to repay the credit if they have to sell their
home after fewer than three years occupancy due to
official business.
Consultant Tax Adviser
This
is information is accurate based on information available as of February
19, 2009. As with any tax law change, check with a tax advisor if there
are any questions regarding using this provision.
More Good News
•Interest
rates are low
•Home
prices have come down in the last year
•Zero
down 100% financing is available. No down payment and your closing costs
can be included in the loan. Call HOME REALTY for a free
pre-qualification. No cost or obligation. And then we can help you find
a home of your own.
Call or E-Mail Us Today!!!!!
