Door is closing on first-time homebuyer tax credit
by AccountingWEB on
Last November, the Worker, Homeownership, and Business Assistance Act of 2009 was signed by President Obama, extending the first-time homebuyer credit through April 30, 2010 and expanding the eligibility requirements for purchasers. (Note that a binding contract must be signed by April 30; a buyer then has until June 30, 2010 to settle the purchase.)
The maximum credit amount is $8,000 for a qualifying homebuyer, defined as a buyer who has not owned a primary residence during the three years up to the date of purchase.
David A. Shaw, president of the California Society of Enrolled Agents adds that the law also extends a credit of up to $6,500 for long-term residents (LTRs) who do not qualify as first-time homebuyers.
“If you’re purchasing a new home as a primary residence and you’ve owned and used another home as a principal or primary residence for at least five consecutive years during the eight-year period prior to the new home purchase, you can qualify,” said Shaw.
Taxpayers who qualify can claim the credit on either their 2009 or 2010 tax returns. IRS Form 5405, First-Time Homebuyer Credit, should be used to claim the credit.
Other criteria may affect qualification, including income limits, filing status, and purchase price of home. Your Enrolled Agent can give you more details.
Members of the U.S. Armed Forces serving outside the United States have an extra year to purchase a principal residence and still qualify for the credit.
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