The new housing bill passed in February contains a First-Time Home Buyer Tax Credit. The credit is designed to encourage first-time home buyers to do so. Buy the home.
First Time Home Buyer Tax Credit Rules:
The home must be purchased as a primary residence.
The Buyers must not have owned a primary residence in the last three years. For couples, both individuals must not have owned a primary residence in the last three years.
Must not be a non-resident alien as defined by the IRS in Publication 519.
Individuals must have a modified adjusted gross income of less than $75,000 annually and couples less than $150,000 to qualify for the full amount.
The home must be closed between January 1st, 2009 and December 1st, 2009.
How the tax credit works ...
The tax credit is 10% of the home's sale price with a maximum of $8,000.
It's a credit and not a deduction.
It's refundable, so if your tax liability is less than the credit, you can get the money back.
If home is sold within three years of purchase, entire amount of credit is recaptured on sale.
Applies only to homes purchased in 2009.
No repayment for purchases on or after January 1, 2009 and before December 1, 2009.
From My Porch ....
Prof. Mike Class Star®
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