The Extended and Expanded Homebuyers Tax CreditWhether you’re a first-time homebuyer or a long-time homeowner, Congress recently extended and expanded a home-buying tax credit for which you may qualify.
Current Homeowners
If you’re an existing homeowner and would like to sell a principal residence (a location where you spend more than 50% of your time) that you’ve lived in consecutively for 5 of the past 8 years, then you may qualify for a tax credit of up to $6,500 on the purchase of a home between November 7, 2009 and April 30, 2010.
Qualifications
If you’re a current homeowner who wants to purchase a new residence, here are a few things to consider. First, a qualifying home must be a single-family, primary residence. This can include condos, co-ops and townhouses. Secondly, your income has a bearing on whether you’re a fit for this credit. The full amount of credit is available for individuals with modified gross incomes (MAGI) of no more than $125,000 (single) or $225,000 (married). The credit phases out above these income levels, and at $145,000 (single) or $245,000 (married), the amount of the return reduces to zero. Homes that are being purchased must go into contract between November 7, 2009 and April 30, 2010 in order to qualify. The purchaser has until July 1, 2010 to close on a home.
Lastly, if you’re purchasing a home for $800,000 or more, you do not qualify for this credit. You also do not qualify if you are considered a “dependent.”
First-Time Homebuyers
If you’re a first-time homebuyer looking for a new home, then you may qualify for a tax credit of up to $8,000 on the purchase of a home between November 7, 2009 and April 30, 2010.
You may be classified as a first-time homebuyer and not even know it. Obviously, if you haven’t previously owned a home you fall into the category of first-time homebuyer. But did you know that if you haven’t owned a principal residence (a location where you spend more than 50% of your time) in the past 3 years you also
constitute what we call a first-time homebuyer?
It’s important to note that if you’re married, both you and your spouse qualify for this tax credit if neither of you have owned a principal residence in the past 3 years. If either of you have, you don’t jointly qualify.
If you’re unmarried, you can jointly purchase a home with somebody if one of you qualifies as a first-time homebuyer. The catch is that you have to allocate the credit amount to the individual who qualifies. This sometimes happens if a parent decides to jointly purchase a home with a son or daughter.
Remember, you still qualify for this tax credit even if you have a vacation home or rental property that isn’t used as a primary residence.
Qualifications
If you are in fact a first-time homebuyer, here are a few things to consider. First, a qualifying home must be a single-family, primary residence. This can include condos, co-ops and townhouses. Secondly, your income has a bearing on whether you’re a fit for this credit. The full amount of credit is available for individuals with modified gross incomes (MAGI) of no more than $125,000 (single) or $225,000 (married). The credit phases out above these income levels, and at $145,000 (single) or $245,000 (married), the amount of the return phases out to zero. You must be purchasing a home in the U.S., and you can’t take advantage of both this tax credit as well as the Washington D.C. First-Time Homebuyers tax credit. Homes that are being purchased must go into contract between November 7, 2009 and April 30, 2010 in order to qualify. The purchaser has until July 1, 2010 to close on
a home. Lastly, if you’re purchasing a home for $800,000 or more, you do not qualify for this credit. You also do not qualify if you are considered a “dependent.”
To get more details about your eligibility to use the tax credit, contact a certified tax specialist. For more information on taking advantage of the the new extended and expanded homebuyers tax credit to purchase a home, contact Cindi Comchoc today!
from realliving.com
