First-time homebuyer credit is really something special for 2009. It has greatly enhanced the tax credit offered in 2008 and corrected several issues that lessened the sweetness of the 2008 credit.
- The credit for 2009 is now a maximum of $8,000.
- The timetable that it is good for is after November 6, 2009, and before May 1, 2010, for purchases of principal residences.
- If there is a binding contract before May 1, then the deal has to close before July 1, 2010.
- There is no recapture of the credit…you earn it, you keep it, unless the home is no longer your personal residence.
- If the home is more than $800,000, then there is no credit, period.
- If the home is no longer your principal residence within thirty-six months of the purchase, then there is full recapture of the credit.
- There are some AGI (adjusted gross income) limits.
- This election can be taken in the prior year: 2009 purchase can be taken in 2008, a 2010 purchase can be taken in 2009.
Now, check this out! If you are a “long-time resident” of a home, then you may qualify for a modified credit.
- The credit is a maximum of $6,500.
- You must have lived in a prior principal residence for five of the last eight years.
- There are some AGI limits.
The IRS has already figured out that this can be abusive, so there are some special requirements for filing.
- A copy of the settlement statement must be attached to the return.
- The taxpayer must be at least eighteen. (Apparently some kid too young for kindergarden filed for the credit.)
- The credit cannot be claimed by a taxpayer who is a dependent of someone else.
The can be a huge tax planning opportunity for many people.