Good news for those of you who are still shopping for a home. Taxpayers have been given an extension on the very popular First-Time Homebuyer Credit.
Valerie RumboughThe extension allows homebuyers to be eligible for up to an $8,000 credit if they purchase a principal residence by April 30, 2010. The credit also extends to those who have entered into a binding contract by that date as long as the contract closes by June 30, 2010. The credit may be claimed on either the 2009 or 2010 tax return. Also, a longtime resident may claim up to a $6,500 credit on the purchase of another home. You are eligible if you have lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the new home is purchased and the settlement date is after Nov. 6, 2009.
The income limits have also been raised, making available the full credit for taxpayers with modified adjusted gross incomes of $125,000, or $225,000 for joint filers. The IRS will issue a new Form 5405 in December to be used for the new credit. No credit is available if the home purchase price exceeds $800,000, the purchaser is under 18 years of age, or is a dependent. To determine if you qualify for either of these two credits, contact your CPA or other financial advisor. Happy home hunting!
Rumbough, CPA, CFP, is chief operations officer with the Baptist Foundation of South Carolina. Contact her at 800-723-7242. In accordance with IRS Circular 230, any U.S. federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.