November 10, 2009

First-Time Homebuyer Credit

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First-Time Homebuyers
First-time homebuyers (those who have not owned a home within the last three years) may be eligible for the tax credit. The credit is 10% of the purchase price of the home, with a maximum available credit of $8,000. Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

Current Owners
This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years. Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

Qualification Deadline
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

Tax Credit
It’s important to remember that the benefit of a tax credit is that it’s a dollar-for-dollar tax reduction. The tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability.

Income Cap
Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible. Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sale price of $800,000.

Term of Ownership
Buyers must live in the purchased property for a minimum of 3 years after closing escrow.

Visit www.irs.gov for specific details.

It’s a good life!

Kay

OH BY THE WAY….My goal is to provide the very best counsel, advice and service possible fo your real estate needs. If I may ever be of help to you, a relative, friend or co-worker please call me with their name and number. Thank you for your trust.

Posted by:Kay Korbel