President Obama signed the stimulus bill that pushed through a tax credit of up to $8000 for first time home buyers at the start of the term. Coming to the close of the eligible period there are talks about extending the measure, but there is no need to wait for the outcome of those talks.
Check the list of frequently asked questions below and capitalize on the credit now.
Who Can Qualify to Claim the First Time Homebuyer Tax Credit?
Only first time homebuyers who purchased within the eligible period can qualify. The definition of first-time home buyer refers only to persons who have not held title to property for at least three years prior to purchase of the current home. Married couples can only qualify if neither party has owned a home in the last three years.
What is the Eligible Period?
Only those who purchased homes between the period January 1 2009 to November 30 2009 are eligible to apply.
What Property Type is Covered?
The 2009 tax credit is applicable only to primary residences, which may be single family homes, condos, townhouses or co-ops. In the case of newly built homes, the ‘purchase date’ will be taken to be the date of first occupation and this must fall between the specified date ranges.
Is there an Income Limit for Claiming the Tax Credit?
Single buyers with annual incomes of up to $75,000 or married buyers with a combined income of up to $150,000 a year may qualify for the First Time Homebuyer Tax Credit.
How is it Calculated?
The tax credit is calculated as the lower of 10% of the value of the home or $8000.
What is the Process to Claim the First Time Homebuyer Tax Credit?
It can be claimed when filing the federal income tax return. IRS Form 5405 should be completed to determine the amount applicable and then this amount can be transferred to line 67 or the 1040 IRS Form for 2009 returns.
Is this on Top of Other Tax Returns for the Year?
Yes. This tax credit does not have to be juggled around other applicable tax credits and will not diminish eligibility.
Are there Any Special Conditions?
Buyers must be willing to hold the property for at least three years. If the property on which the tax credit is claimed is sold before that time, it will have to be refunded.